Sabah is set to sign an agreement with national oil company Petronas that will give the state a 40% stake in a floating liquefied natural gas (FLNG) project located in Sabah. In addition, Sabah will receive a 20% stake in an oil and gas field in Sandakan secured by Petronas. The state government expects the agreement to be signed within the next few months. Chief Minister Datuk Seri Hajiji Noor said, "We expect to sign an agreement with Petronas within the next few months, under which Sabah will receive a 40 per cent stake in the floating gas facility in the state. For the oil and gas field in Sandakan that Petronas has secured, Sabah will also be given a 20 per cent stake" [1, 2, 3].

The deal follows close cooperation between the Sabah state government and the federal government. Hajiji highlighted Sabah's investor appeal, noting nearly 40 foreign diplomats and high commissioners have met with him over the past five years to explore investment opportunities. He said, "They are attracted by our investor-friendly policies and believe they will drive Sabah's economic growth. That is exactly what we are working towards" [1, 2, 3].

Existing industrial parks in Sabah, such as Kota Kinabalu Industrial Park (KKIP) and Sipitang Oil and Gas Industrial Park (SOGIP), are nearing full capacity. To accommodate further growth, Sabah is expanding new industrial zones, including the Palm Oil Industrial Cluster (POIC) on the east coast and parks focused on the blue economy [1].

The state also plans a new township project in Kalabakan spanning about 1,000 acres near the Sabah-Indonesia border to support economic growth. Sabah will establish a customs, immigration, and quarantine (CIQ) complex at the border and build a connecting road to improve cross-border trade and mobility [2, 3].

The Chief Minister publicly announced the expected deal with Petronas on August 1 during the launch of the Jelajah Rakyat and MADANI Rahmah Sales programmes [2, 3].

The upcoming agreement marks a major step in Sabah’s energy sector development and is expected to formalize within months.