Monday, November 24, 2008




The proposed 300MW gas-fired power plant in Kimanis will benefit the people in the West Coast of Sabah, Chief Minister Datuk Seri Musa Aman said.

“Gas which will land at the Sabah Oil and Gas Terminal (SOGT) in Kimanis will be used to fire the 300MW plant and those living in the West Coast will benefit when the additional power is channelled to an existing grid system,” he said here yesterday.

Musa said this in his speech at the Shareholders Agreement (SHA) signing ceremony between Petronas Gas Bhd and Yayasan Sabah for the development of the plant.

According to him, by having better electricity supply, Sabah can also push for more investment for its industrial sector and other development initiatives which aim to bring growth in the long run.

“I wish to state here that the Government is concerned about power shortage and is committed to doing what it can to improve the situation. Allow me to assure the people of Sabah that we are not sitting on our laurels but instead working hard with parties such as Petronas to make sure that there will be sufficient power supply for the people and development requirements,” he said.

He added that the State Government is constantly looking for solutions because it understands that demand for electricity will continue to rise not just in the more developed urban areas but also in the outskirts and a large number of rural areas.

Sabah, Musa pointed out, has been an oil and gas producer for a long time and in the last six years, new discoveries were made in deepwater areas off the coast of the State.

He said that although oil and gas found off Sabah is considered a national resource, the State too is serious about developing its own oil and gas industry.

“This is one way of diversifying our economy, creation of supporting industries and employment opportunities for locals,” he said and added that returns from the lucrative industry can also be used to a certain extent for poverty eradication programmes in Sabah.

The State Government, he stressed, has been in discussions with Petronas since 2006 on the concept for a petrochemical plant that includes a master plan for downstream gas industries and it intends to work closely with Petronas to develop all possibilities in the oil and gas sector, including in downstream industries.

The fact that we have not publicised all these initiatives does not mean that we are not doing anything. All announcements on Government plans will be done at an appropriate time when key aspects of projects have been finalized and can be implemented.

“We do not want to make announcements for political mileage or vested interests,” he said adding that State agencies like Yayasan Sabah are currently working closely with Petronas to develop petrochemical projects such as the ammonia and urea plant.

According to Musa, a comprehensive study undertaken by Petronas on the development of the oil and gas industry in line with the requirements of the Sabah Development Corridor (SDC) is expected to be ready by the end of the year.

“We are eagerly awaiting the outcome of the study and we want to assure Petronas that the State will give its full support to Petronas to invest in Sabah. We also welcome Petronas’ commitment to invest billions of ringgit in developing the SOGT in Kimanis and we have the highest confidence that the small towns in the State’s west coast will be the catalyst for future growth of the oil and gas industry in Sabah,” he said.

He expressed hope that the investment will bring more development in the area and that spin-offs will eventually trickle down to the local community.

Musa also said that the State Government is looking forward to the establishment of a training centre at the SOGT as those trained’ there can be absorbed into the SOGT, the Kimanis power plant and for other downstrean industries.

This, he said, fits in well with one of the SDC aims of creating 900,000 jobs by the end of the plan in 2025.

“Today’s signing is very significant as it marks the first project in Sabah to utilise the gas which will land at the SOGT. It is our hope that more projects will come on stream after this to make use of gas from Sabah’s own fields,” he said.

Meanwhile Petronas Gas Chairman Wan Zulkiflee Wan Ariffin in his opening remarks said that the SHA was signed following a Joint Development Agreement inked between Petronas and Yayasan Sabah on June 13 this year.

Under the SHA, the partners will form a joint venture company (Petronas 60 percent and Yayasan Sabah 40 percent) to develop, operate and maintain the proposed gas-fired power plant and its related facilities as well as infrastructure.

The joint venture company would also undertake the sale and delivery of electricity from the proposed power plant to meet the growing demand for electricity in Sabah, he said, adding that the first phase of the project is expected to be completed in 2012.

“Once completed, the first phase will be able to produce 150MW and the second phase is expected to be completed between six to 12 months later,” he said.

The ceremony which was held at a leading hotel here were also attended by State Secretary Datuk Sukarti Wakiman, Assistant Minister of Industrial Development Datuk Jainab Ahmad, Kimanis MP Datuk Anifah Aman, Sabah Foundation Director Tan Sri Khalil Jamalul, his Deputy, Dr Johan Ariffin, Petronas Gas Bhd CEO Samsuddin Miskon and Kota Kinabalu Mayor Datuk Iliyas Ibrahim.