Thursday, November 20, 2008
FRIDAY-21 NOVEMBER 2008-RM3 BLN GAS PIPELINE PART OF INTEGRATED OIL AND GAS PROJECT IN SABAH: CM
RM3 BLN GAS PIPELINE PART OF INTEGRATED OIL AND GAS PROJECT IN SABAH: CM
Petronas’ oil and gas projects in Sabah generate multiplier effects on the State’s economic development and the people.
Chief Minister Datuk Seri Musa Aman in disclosing this yesterday said the positive impacts were obvious in the urban areas and new industrial centres.
There were more business and job opportunities, and human resources to support the oil and gas-based industry in the State, according to him.
The State Government realized the need to create oil and gas downstream industries, as contained in the Sabah Industrial Action Plan and the necessary steps had been taken.
He said the State Economic Planning Unit had set up a temporary committee comprising the State Attorney General Office, Inland Revenue Secretary’s Office, Finance Ministry, Industrial Development Ministry and Industrial and Research Development Department; and the Sabah Energy Corporation had come up with a strategy and integrated measures to develop the oil and gas- based downstream industry in Sabah.
On a call by Luyang Assemblywoman, Melanie Chia, to cancel the RM3 billion gas pipeline between Kimanis and Bintulu (Sarawak), Musa responded that the ownership, power and venturing rights, use and extraction of petroleum resources in Malaysia are under the jurisdiction of Petronas exclusively as stipulated in the Petroleum Development Act, 1974.
“However the Federal Government had assured that the Sabah Oil and Gas Terminal (SOGT) will not affect the oil and gas supplies to the State as well as the royalty payment on the oil and gas sent to Bintulu,” he said.
Further explaining in his winding- up speech at the State Legislative Assembly yesterday, Musa said the Sabah-Sarawak Gas Pipeline (SSGP) project is part of the integrated oil and gas project which is carried out by Petronas in Sabah.
The integrated project involves the development of the newly found oil and gas boarders off Sabah waters, construction of the SOGT in Kimanis and construction of SSGP from Kimanis to the LNG Petronas Complex in Bintulu.
Through the SOGT project, gas resources would be released from off Sabah waters and docked at SOGT Kimanis. Part of the gas will be channelled towards the use of energy and industrial sectors in Sabah, while the remainder will be sent to LNG Petronas Complex in Bintulu.
He explained that as of Jan 1 this year, the gas reserve in the Sabah waters was 12.7 trillion square feet or about 14 per cent of the overall Country’s gas reserves.
“The gas boarders in Sabah waters are scattered and small, not like those in the Peninsular Malaysia and Sarawak. Development on the gas reserves in Sabah will have to be done in an integrated way and it involves high costs,” he explained.
Musa also said the development investment cost on oil, gas and petrochemical plants shot Lip following the 225 per cent increase on construction materials, such as iron and metal in the last five years.
Yayasan Sabah and Petronas had also signed a pact to build a 300 megawatt electricity generation plant in Kimanis, which could beef up the energy supplies in Sabah.