Petronas fails to halt Petros suit on gas payment

KUCHING: Petronas has failed in its bid to delay a suit that Petros had filed to stop the national petroleum company from demanding payment for natural gas.
On Oct 15 last year, Sarawak-owned petroleum company Petros filed a suit seeking a declaration that Petronas' demand for a RM7.95 million bank guarantee for gas payment was "unconscionable, unlawful and, therefore, null and void".
Petronas had sought to stay Petros' suit until a case filed by Shell SDMS Sdn Bhd against Petronas and Petros in the Kuala Lumpur High Court had been settled.
Shell SDMS's court action was to determine which company it should pay for the natural gas it received.
Judicial Commissioner Datuk Faridz Gohim Abdullah in dismissing Petronas' application agreed with Petros lead counsel Sim Hui Chuang and Sarawak government special counsel Datuk Seri J.C. Fong that there were no special circumstances to warrant a stay.
Faridz also agreed that a stay of the Kuching proceedings while waiting for the Kuala Lumpur case to be disposed would be an injustice to Petros and the public interest.
Petros and Sarawak argued the Kuching case was ready to be heard, the Kuala Lumpur proceedings were still at pre-trial case management, with the next hearing on May 23.
They argued that there was no indication when the Kuala Lumpur case would start, and a stay of the Kuching proceedings could potentially be for years.
The federal and Sarawak governments have been added to appear in the hearing as amicus curiae (friends of the court).
Faridz has set June 11 to hear Petros' originating summons.
Petronas lead counsel Alex Ngu's application for a stay on the dismissal of the injunction was also dismissed by the court.
The judicial commissioner said Ngu should make a formal application on the appeal.
Petros is disputing Petronas's demand for a RM7.95 million bank guarantee under the Sarawak Gas Sales Agreement (SGSA) dated Dec 30, 2019.
Petros contends that the SGSA is invalid because Petronas lacks a license under Sarawak's Distribution of Gas Ordinance 2016 (DGO 2016) to distribute gas in the state.
Petronas, on the other hand, maintains that its rights under the federal Petroleum Development Act 1974 (PDA) supersede state laws like the DGO 2016.
In an affidavit filed on Nov 5, last year, Petronas said it was the legitimate aggregator of natural gas, including for domestic distribution, and that the SGSA was valid and enforceable.

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