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RM9.5b oil storage, refinery facility to be built in Sipitang
Published on: Saturday, December 14, 2019

KOTA KINABALU: State-owned Sabah Oil and Gas Development Corporation (SOGDC) Sdn Bhd has signed an agreement with a private firm to build Sabah’s first petroleum oil storage and refinery facility with investments over US$2.3 billion (RM9.5 billion).

The agreement with Petroventure Energy Sdn Bhd will see the plant being built at the Sipitang Oil and Gas Industrial Park (Sogip) in southwest Sabah, with construction expected to take between three and five years.

Deputy Chief Minister Wilfred Madius Tangau, who is also state trade and industry minister, witnessed the signing of the agreement between SOGDC CEO Geaneve Jane and Petroventure Energy president-cum-managing director Mohd Sham Mohd Yassin here Friday.

Tangau said the mega project is not only good for the state’s economic development but will also create 3,500 jobs.

Jane, in her speech, said the oil storage and refinery plant in Sogip will pave the way for more diverse downstream activities in the state.

“The chief impact will be on our economy. The refinery can create a new chain of supply which will be beneficial for many businesses,” she said.

Sham said this plant will have storage facilities for two million cubic tonnes of petroleum products while the refinery will have a capacity to produce 3.5 million tonnes yearly.

“The plant will produce diesel and gasoline as our main products. It will take three to five years for production to commence.”

He said the state will also benefit in terms of technology transfer, thanks to the Chinese joint venture partner, China CACS Investment Group Company Limited.

Meanwhile, Chief Minister Datuk Seri Mohd Shafie Apdal said the State Government is on the right track on some upcoming initiatives with Petronas, particularly in developing downstream activities that would provide ample jobs opportunities.

He said he met the Petronas President here Friday to discuss various matters, including the need for Sabah to go downstream in the industrial sector.

“We met today (with Petronas President) and we are doing something on the way forward for Sabah on some initiatives in regard to gas and the need for us to develop downstream activities in the State.

“In fact, we have identified some initiatives but I told him that I will look into the details. There was a walkabout of Petronas Way Forward in Sabah to setting up field of the initiatives…I think this is good for the State. In January, I will be able to spell out clearly,” he said, when officiating the Kapayan Christmas Celebration in Kg. Nagasiba, Penampang.

 The event was organised by Kapayan Assemblywoman Jannie Lasimbang who is also the State Law and Native Affairs Assistant Minister.

Also present were State Finance Assistant Minister Kenny Chua, nominated assemblyman Datuk Loretto S. Padua Jr, Penampang police Chief DSP Mohd Haris Ibrahim, community leaders and local communities.

He said he asked for 20 per cent oil royalty for Sabah and funds from Petronas. “What’s important for us is not the percentage (from oil and gas) but the money or allocation that Petronas can give to us that we can use to develop Sabah.

“I can assure you that I will give back the State’s revenue/earnings to the benefit of the people of Sabah and for the development of the State as I want to industrialise Sabah.

“I did tell the Petronas President to use the gas in Sabah for downstream activities that will provide ample jobs to the Sabahans and at the same time develop Sabah,” he said.

Shafie said the State Government would also table a proposed law under the Energy Commission at State level which the Prime Minister Tun Dr Mahathir has agreed at the Malaysia Agreement 1963 (MA63) meeting and in the Federal Cabinet.

He said he would be meeting the PM on the MA63 meeting this Monday (Dec 16) where he would voice out what Sabah needs.

One of them is to let Sabah take back Sabah Electricity Sdn Bhd (Sesb) and manage electrical supply in the State. In March next year, there will be transactions as part of the transition to take over SESB.

During his visit to Japan, recently, he said he assured Japanese investors on supplying of timber if they set up furniture factories in the State and export the furniture to Japan.

 



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