Kota Kinabalu: It is time for Sabah to shift from commodity-based activities to value-added activities that will provide a greater economic boost to the State, said Datuk Harun Ismail.
The Managing Director and CEO of Sabah Oil and Gas Development Corporation Sdn Bhd (SOGDC) said the establishment of an oil refinery at the Sabah Oil and Gas Industrial Park (Sogip) is one of SOGDC’s key aspirations and visions.
“This is because an oil refinery is a value-added downstream activity, unlike crude oil storage, which remains a commodity-based activity,” he said at the launch of the Petroleum Oil Storage and Refinery Plant Construction Project at Sogip, held at the Sabah International Convention Centre (SICC) on Tuesday.
Recently, SOGDC, in collaboration with Gibson Shipbrokers Ltd, launched a gas-based product storage hub at Sogip.
“Today, we are launching a crude oil storage project, making Sogip a comprehensive hub for the storage of both crude oil and liquefied gas.
“In addition, the recent declaration and establishment of Sogip Port will further strengthen this project. The port creates a ‘win-win’ situation for all parties—SOGDC, investors in Sogip, and Sabah,” said Harun.
He also shared several key facts about the Petroleum Storage and Refining Plant Construction Project, including that it involves foreign direct investment (FDI) worth USD3.5 billion; expected job opportunities include 3,000 workers during the construction phase and 1,000 workers once the refinery is operational; and the project covers 400 acres at Sogip, with a strategic coastal location that offers logistical advantages.
The estimated completion time is between three and five years.
Facilities will include a jetty, petroleum laboratory, administrative building, fire station, oil blending plant, a refinery production capacity of seven million tonnes per year or 150,000 barrels per day (BPD), and storage facilities for crude oil and refined petroleum products with a capacity of three million cubic metres.
The project has secured key licences, including PDA 2 under the Investment, Trade and Industry Ministry (Miti), an Approved Permit (AP) for petroleum marketing and distribution in Malaysia and a Factory Manufacturing License (FML) from the Malaysian Investment Development Authority (Mida).
“The main benefits of this project for Sabah include strengthening the State’s crude oil supply, stimulating economic growth through capital injection from FDI, generating economic spin-offs such as job and income opportunities, improving quality of life through Corporate Social Responsibility (CSR) initiatives, and attracting more private sector investment to support this industry,” he further explained.
Harun said that overall, the launch of the oil refinery and storage facility marks a transformative moment for Sabah.
“It reflects our collective ambition to drive economic growth and enhance regional competitiveness. “The launch of this refinery is a testament to our commitment to strengthening Sabah’s oil and gas sector, in line with the Hala Tuju Sabah Maju Jaya development plan introduced by Chief Minister Datuk Seri Hajiji Noor,” he added.
He believes this project will bring significant benefits to Sabah and serve as a catalyst for the State’s economic development.
“With the support and cooperation of all stakeholders, I am confident this project will achieve great success and create a positive impact for all of us.”
