Lower oil price is not a valid reason: SAPP

Kota Kinabalu: Lower gas price is not a valid reason for the cancellation of the Lahad Datu Regasification Terminal which could have helped alleviate the energy woes of Sabah's east coast region.Sabah Progressive Party (SAPP) President Datuk Yong Teck Lee said the project was approved in 2012 and scheduled to be completed in 2015 and by the time oil and gas prices began to fall in the middle of last year, the project would have been completed or near completion.

"In any case, why would lower gas prices affect the Regasification Terminal investment? Would not lower gas prices make it more viable for our energy producer to produce cheaper electricity?" he said in a statement here, Friday.

Yong added that lower gas prices only means that Petronas Gas makes less profits from Sabah's oil and gas.

Between June and September last year, Petronas Gas made a whopping profit of RM305 million and up to that point, the reduced profits was due to "foreign exchange loss due to finance lease liabilities" as reported by Petronas Gas to Bursa Malaysia on Thursday.

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"Petronas Gas' announcement that the cancellation of the RM1billion regasification project at Lahad Datu was due to falling oil prices does not make sense.

"As reported in the media, security concerns at Lahad Datu had caused a 'stop work order' to be issued in 2013.

"Falling gas prices is only an afterthought and a flimsy excuse by Petronas because the project should have been completed before the fall of oil and gas prices," he said.

Yong said the cancellation of the Lahad Datu regasification terminal project is an admission on the part of the Federal Government that it has failed to honour its constitutional duty to provide for Sabah's security, which is the basis for Sabah agreeing to form Malaysia in 1963.

"Sabah's Ministers must speak up on this matter and not leave it for Sabahans to find out from Petronas Gas's filing of reports to Bursa Malaysia.

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"After all, the regasification project is a joint venture with Sabah Energy Corporation, a 100 per cent Sabah government agency," he said.

In a filing with Bursa Malaysia, PGas said the termination of the shareholders agreement effective Feb 10 was in view of 'the prolonged uncertainty' of the regasification terminal project. No detail was given in the announcement.

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