Sarawak’s Gas Push Could Undermine Petronas - Analyst

Sarawak’s push to let its state-owned firm Petros take over from Petronas as Malaysia’s sole gas aggregator may carry risks that stretch far beyond the state. 

Oil and Gas analyst Jamil A Ghani told Bernama the aggregator’s role is “technical but powerful,” shaping whether natural gas is channelled to local industries or shipped overseas as liquefied natural gas (LNG).

“Every molecule of gas passes through the aggregator. Whoever controls it decides if Sarawak fuels its factories or if the gas is exported. 

Giving Petros that authority could mean Petronas loses revenue, while still being locked into long-term export commitments,” he said.

Currently, about 94% of Malaysia’s gas is exported, with just 6% kept for domestic use, a sore point for Sarawak, which sits on 60% of the reserves.

Leaders there argue their industrial ambitions will remain capped unless more gas stays home.

Jamil acknowledged the frustration but warned that changing aggregation could disrupt Petronas’ ability to manage supply end-to-end, potentially unsettling buyers in Japan, Korea, Taiwan and China who see Malaysia as a reliable LNG supplier.

“Reallocating gas without proven demand centres or binding offtake contracts risks stranding supply and undermining decades of trust,” he added.

Putrajaya has tried to ease tensions by nearly tripling Sarawak’s allocation to 1.2 billion cubic feet per day. 

Jamil said this move can support the state’s plans but only if demand, pricing, and contracts are properly structured.

“The challenge is marrying Sarawak’s autonomy with national stability. With clear rules and careful sequencing, what looks like a standoff could instead become a sustainable model,” he said.