Second RM6b ammonia plant
Published on: Friday, February 03, 2017
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Kota Kinabalu: A second ammonia plant will be built at the Sipitang Oil and Gas Industrial Park (Sogip) as part of the oil and gas industry's development in Sabah this year. Disclosing this, Deputy Chief Minister-cum-Industrial Development Minister Datuk Seri Raymond Tan said the project will see Sabah venturing into the natural gas downstream industry and would cost more than the existing Sabah Ammonia Urea Project (Samur) in Siptang.

"Sabah is looking into developing the oil and gas industry as another prospective area to be ventured into like engaging in natural gas development instead of selling our ample natural gas without value adding.

"What Samur does is turn the natural gas into solid substance like fertilisers and the project is worth about RM6 billion.

"Hence, for this year, Sabah will be venturing into another project which is a different one because Sabah will have a bigger share in setting up the second ammonia plant with the cost being more than RM6 billion," he said at a Chinese New Year luncheon, Thursday.

Also present were Department of Industrial Relations director Patrick Tan under Tan's ministry, POIC Sabah Sdn Bhd Chief Executive Officer Dr Pang Teck Wai, Kota Kinabalu Industrial Park (KKIP) Sdn Bhd Chief Executive Officer Melvin Disimond, Sipitang Oil and Gas Industrial Park (Sogip) General Manager Abdul Kadir Abdullah @ Damsal, Sabah Economic Development Corporation (Sedco) Group General Manager Pg Saifuddin Pg Tahir and other senior officials.

Tan said the State Government will be careful in selecting its partner to develop the project as it involves technology and expertise.

In a related development, he said Sabah will be having its own plant for regasification in Sandakan that will be set up by Petronas to provide 300 megawatt power supply to an independent power plant (IPP) to address the acute power outages in the East Coast of Sabah.

"The State Government is going for the natural gas plant to supply 300 megawatt electricity to the East Coast as a coal plant to produce 300 megawatt electricity was cancelled five to seven years ago following strong objections from environmental activists.

"We are willing to spend more money on building the plant using natural gas which shows the government's concern on protecting the environment although developing the plant and IPP would cost more," he said.

Presently, he said the project in Sandakan that will be operated by a State-owned company is awaiting the required licensing and permits, among others.

He said Sabah will buy the gas from Petronas for the plant and eventually be able to supply the needed power supply to the East Coast.


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