Where Does Malaysia’s Energy Come From & What’s Next?

As Malaysia navigates the world’s evolving energy landscape. Our future depends on how well we manage our transition into the future while safeguarding our existing resources and wealth.

(Credit: Freepik)

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Hey, quick question—when you flick on the TV, fill up (or plugin) your car, or fire up the stove, do you ever wonder where all that power comes from? No? You’re not alone! Most of us don’t think about it at all actually.

But here’s the thing: the world’s energy landscape is evolving at lightning speed, and the future depends on how well we manage this transition while safeguarding our existing resources and wealth.

It’s not just about keeping the lights on—it’s about making sure Malaysia has a sustainable, cleaner energy future. So, let’s explore what’s powering Malaysia today, why it matters and what’s next.

Malaysia’s Energy Menu

If power sources were like dishes on a menu, fossil fuels would be the main courses. As of 2020, fossil fuels (think oil, gas, and coal 🏭) made up a staggering 96.1% of the country’s energy mix. Here’s the breakdown:

Natural Gas: 42.4% (the main entrée—like your Kari Ayam 🐔 and Rendang Daging 🐮, always essential)
Crude Oil and Petroleum Products: 27.3% (the hearty side dishes—like your Acar and Kangkung Goreng Belacan 🥗, they complement the meal perfectly)
Coal: 26.4% (the filling starches—like some rice 🍚, tofu and Tempeh, providing that necessary bulk)
Renewables (like solar and hydropower): 3.9% (the garnish—like a scoopful of Sambal, adding a touch of flavour but still in the background 🍛)

Why Does this Fossil Fuel Appetite Matter?

Malaysia’s economy thrives off the energy sector. We’re talking about a slice of the GDP pie that’s 28% thick. Plus, a quarter of the country’s jobs are in energy—yep, 25% of the workforce. That’s a lot of paychecks tied to fossil fuels. And that’s not all:

31% of government revenue comes from petroleum products.
13% of all Malaysian exports are energy exports.

Simply put, fossil fuels are the backbone of the economy, keeping people employed, funding government coffers, and powering homes, cars, and industries for over 10 million Malaysians every day.

Although renewables are on the rise, it’s still fossil fuels that keep the country running.

Does Malaysia Really Have That Much Dinosaur Juice 🦖?

Oh, yes! Malaysia’s loaded with wealth and resources—we all remember learning that during Sejarah, Geografi, and Ekonomi classes back in school, don’t we?!

Currently, we’re the second-largest oil producer in Southeast Asia and the third-largest liquefied natural gas (LNG) exporter in the world. China, Japan, South Korea, India, and our other ASEAN neighbours are regular customers.

Most of our oil and gas reserves are located offshore, especially in Sarawak, Sabah, Kelantan, and Terengganu. These reserves ensure Malaysia’s prominent spot on the global energy map, fueling economies across Asia.

But here’s the catch: in Peninsular Malaysia, we’re starting to run low on oil and gas.

About five to ten years ago, the Peninsular was producing around 700,000 barrels of oil per day. Now, that figure is closer to 350,000 barrels a day—a very noticeable drop.

In just a decade, our output has halved and it’s expected to decline even faster.

How Does Oil and Gas Get to You (and Me)?

Now, here’s a quick look at the journey of oil and gas from extraction to you. It starts with giant offshore platforms in places like the Baram Delta Operations (BDO) and the Floating Liquefied Natural Gas (PFLNG) vessels which are currently moored in Sarawak and Sabah, where rigs drill deep into the seabed to pump up oil and gas.

(Credit: Malay Mai/Oil and Gas Innovation via Facebook)

Next, this raw energy is transported through extensive pipeline networks, such as the Peninsular Gas Utilisation (PGU) system, which spans over 2,600 km, and the Kimanis-Bintulu Sabah-Sarawak Gas Pipeline (SSGP), which covers 500 km.

Additionally, tankers (on land and sea) transport crude oil and LNG to domestic refineries and international markets.

In Sabah and Sarawak, facilities such as the Bintulu LNG Complex and the Sabah Oil and Gas Terminal (SOGT) play key roles in processing and distributing these resources.

At these facilities, crude oil is refined into petrol, diesel, and jet fuel. Meanwhile, natural gas is processed into components like propane and butane and other forms of energy for various applications.

Finally, these refined fuels are delivered to power plants like Kimanis in Sabah and Sultan Ibrahim in Johor—the world’s first plant to use the super-efficient 9HA.02 gas turbine for low-carbon energy generation.

They also make their way to gas stations, industries, and homes across Malaysia, ensuring everything runs smoothly from deep-sea platforms to your local petrol station.

Protecting Our Treasures Under the Sea

Malaysia’s oil and gas fields aren’t just cash cows—they’re national treasures. As we’ve established, many of these reserves sit in the South China Sea, which is prime real estate for, well, international tensions.

To safeguard our resources, Malaysia has intensified its defense efforts, including the establishment of a new naval base in Bintulu, Sarawak.

This protection goes beyond financial concerns; it’s about ensuring energy independence, security, and securing Malaysia’s future.

So What’s Next for Malaysia’s Energy Future 🌎?

Right now, Malaysia’s energy game is dominated by fossil fuels. They’re the star players, no question. But guess what? Renewables are warming up on the sidelines, ready to take the spotlight.

Malaysia’s got a game plan, and it’s called the Responsible Transition (RT) Pathway 2050, part of the National Energy Transition Roadmap (NETR). The goal? To make the energy sector greener, cleaner, and way more sustainable.

This will involve slashing our greenhouse gas emissions by 32% by 2050—reducing from 259 megatonnes of CO2 equivalents in 2019 to a much leaner footprint.

Why does this matter? Well, if we pull this off, the economic upside is huge. We’re talking RM220 billion in green energy contributions to the GDP by 2050—up from just RM25 billion in 2023.

And the cherry on top? This transition could create 310,000 new jobs. That’s more money, more jobs, and less pollution. A total win-win-win!

If everything goes as planned, by 2050, our reliance on fossil fuels will drop to 77%, with natural gas stepping up as the primary energy source, covering 56% of our needs.

Meanwhile, renewable energy sources such as solar, hydro, and biofuel will grow to account for 23% of the energy mix.

But this transition isn’t as easy as just flipping a switch. It’s a collaborative effort, with each region playing a key role.

On the east side, states like Sabah and Sarawak are making big moves—attracting foreign investments, building renewable energy infrastructure, and ensuring everyone, especially in rural areas, gets reliable and affordable energy.

Meanwhile, over in the Peninsular, states like Johor, Terengganu and Pahang are also stepping up, with similar goals and initiatives. Plus, we’re also gearing up to supply green energy to other nations too.

Throw in advanced tech like Carbon Capture, Utilization, and Storage (CCUS), along with LNG networks, wind farms, and more cutting-edge power plants, and we’re set for a green shift towards the future!

Energy isn’t just about keeping the lights on—it powers communities and drives the economy.

And as Malaysia moves forward, collaboration between East and Peninsular Malaysia will be key to bridging gaps and creating opportunities for everyone, especially future generations.

So, the next time you’re enjoying your favourite TV show or driving from coast to coast, think about the energy that’s making it all possible. It’s the lifeblood of Malaysia, driving progress and uniting us all.

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