KOTA KINABALU, Oct 11 — The Sabah state government is expecting to collect oil and gas (O&G) royalties and annual State Sales Tax (SST) payments amounting to about RM2.45 billion with the inclusion of ammonia and urea in its SST list.

Chief Minister Datuk Seri Hajiji Noor said with the inclusion of the two petroleum products in the August-implemented SST, Petronas’ Petrochemicals (PetChem) was also included for SST payments where the state earned about RM10 million for the month of August through additional payments for the Sabah Ammonia Urea (SAMUR) operations at the Sipitang Oil and Gas Industrial Park (SOGIP).

"The amount (RM2.45 billion) is dependent on the international oil prices but Sabah is expecting to collect that amount per year.

"We hope to develop and expand the O&G business with all companies in an atmosphere of harmonious partnership,” he said at the signing of the Natural Gas Supply Agreement and Exchange of Asset Sale and Purchase Agreement and Gas Business between Petronas and Sabah Energy Corporation Sdn Bhd (SEC) here today.

The text of Hajiji’s speech was read by state Local Government and Housing Minister cum state Finance Minister II Datuk Seri Masidi Manjun.

Hajiji said through the collaboration with Petronas, SEC, which is a Sabah government-linked company (GLC), became the largest supplier and transporter of domestic natural gas in the state, thus becoming one of the major players in the O&G industry in Malaysia.

He said that with the acquisition of the Petronas gas contract in Sabah, SEC is now the largest domestic supplier and transporter of natural gas in the state, which will be involved in transferring more than 250 million standard cubic feet per day of natural gas to existing independent power generators.

"With a larger customer base and infrastructural control, SEC is poised to further expand its gas business in Sabah, in line with the state government’s desire to see increased participation of the state’s GLCs in the O&G industry.

He said through the collaborative effort, SEC will own and operate the main downstream natural gas infrastructure in the state.

Hajiji also noted that with the acquisition of the natural gas business owned by Petronas, SEC will supply 86 per cent of fuel for power generation purposes in the state.

"With this, the state government through the SEC will be able to move forward in exploring the full potential of the state’s natural gas industry chain which will provide good economic returns to Sabah,” he added. — Bernama