Shell MDS ordered to pay Petronas for gas overdue payments by Malaysian court

Local media reported that the Malaysian Court of Appeal overturned an injunction by the High Court that allowed Shell MDS Malaysia to stop its monthly payments of gas to national energy company Petronas as of August 2024.

According to The Edge, the three-judge panel unanimously ruled that Petronas had not breached its agreement, since it continued to supply gas to Shell MDS during the dispute.

Shell MDS received competing invoices for 80 million ringgit from Petronas as well as Petros, an aggregator of gas owned by Sarawak.

Shell MDS sought an injunction that would stop Shell MDS from making monthly payments until Petronas/Petros resolved their dispute. Petronas was also ordered to continue supplying gas to Shell MDS by the injunction.

The Edge reported that Shell MDS claimed it was caught in the middle of competing claims from Petronas Petros and sought protection against double payments.

Shell did not immediately respond to an inquiry for comment Tuesday.

Petronas insisted that it had met all its contractual obligations, and was entitled to payment for the gas which it continued to supply Shell MDS.

The Edge reported that the court lifted on Monday a separate injunction which prohibited Petronas to use Shell MDS’s bank guarantee as a means of paying for gas.

Petronas claims Shell MDS owes between 70 and 80 million ringgit each month. The total arrears including interest could reach 1 billion ringgit.

Shell MDS was ordered to pay Petronas all outstanding amounts from August 2024 through October 5, this year. The payment is due on October 6. The court also ordered Shell MDS to pay Petronas a total of 50,000 ringgit, and Petros 30,000 ringgit for costs.

The court also ordered Petronas Petros to act to resolve the dispute in the shortest time possible.

Petronas did not respond immediately to a comment request on Tuesday either. (Reporting and editing by Ashley Tang)

(source: Reuters)