Petronas to Decommission Troubled Sabah-Sarawak Gas Pipeline

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Petronas to Decommission Troubled Sabah-Sarawak Gas Pipeline

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Petronas Towers with Malaysia national flag (© Shutterstock/sacitarios)
Petronas Towers with Malaysia national flag (© Shutterstock/sacitarios)

Malaysia’s state-owned oil and gas giant Petronas will decommission its problem-plagued Sabah Sarawak Gas Pipeline (SSGP) by 2027, according to the company’s 2025-2027 Outlook report released on Tuesday, January 28, 2025.

The 512-kilometer (318-mile) onshore pipeline, intended to transport gas from offshore Sabah to Sarawak, has been plagued by multiple challenges, including leaks, fires, and other incidents since its construction.

The 36-inch diameter pipeline, part of Petronas’ Sabah-Sarawak integrated oil and gas project, was designed to carry 750 million cubic feet per day of gas to the Petronas LNG Complex at Bintulu. The project cost $4.6 billion ringgit ($1.047 billion USD).

The decision to decommission the SSGP was revealed in a single sentence within Petronas’ 81-page outlook report. The company cited the need to restore the area to a safe and environmentally stable condition, noting that the decommissioning would include the abandonment of the SSGP, described as an onshore facility.

The pipeline has experienced numerous incidents, including a fatal fire in 2014, a gas leak in 2018, another leak in 2019, and a pipeline rupture and fire later that year. 

In September 2022, a leak caused by soil subsidence forced Petronas to declare force majeure on gas supplies to Malaysia LNG Dua, one of four liquefaction projects at its Bintulu LNG complex. Part of the pipeline had been shut down following that incident.

Petronas CEO Tengku Muhammad Taufik had previously stated there were no plans to reroute the pipeline, with the remaining section intended to continue serving customers in Sabah.

The decommissioning of the SSGP is part of a broader effort by Petronas to decommission matured assets in its upstream operations. Over the next three years, the company plans to plug and abandon approximately 153 wells and abandon about 37 offshore facilities.