Set up oil refinery in Sabah

by Murib Morpi. Posted on May 14, 2011, Saturday

KOTA KINABALU: An oil refinery is needed in Sabah for the State to truly benefit from the operation of the soon-to-be developed Sabah oil and Gas Terminal (SOGT) in Kimanis, said Parti Bersatu Sabah (PBS).

PBS vice president Datuk Herbert Timbun Lagadan said Sabah through the Federal Government, should request Petronas to build such a facility in the State, to allow the huge potentials created by the industry to be fully tapped by local companies and the people.

Lagadan when making the call yesterday, said as a ‘fixed deposit’ state, Sabah has the merit to ask for the refinery plant to be set up here for processing oil and gas extracted from its own soil.

In addition, the State should be equipped with an oil refinery based on the fact that it is a major oil producer of the country, he added.

“Why can’t Sabah have its own oil refinery when Sarawak has its own? Since Sabah is a fixed deposit state for the BN government and a major oil producer of oil and gas, then surely we possess the merit to ask for the facility to be built here,” he said.

According to him, Sabahans find it hard to swallow the reasons given by the central government that gas from the State is be siphoned to the terminal in Bintulu, Sarawak to save cost.

He said the decision not to allow Sabah to have its own oil refinery could be viewed as an attempt to sideline Sabahans from participating in the mega oil and gas industry, by piping the State’s natural resources out to another state.

The lack of opportunities in the State for the people to directly and actively participate in the development of the oil and gas industry has been the source of discontent among local leaders in Sabah, both from within BN and the opposition alike.

Apart from PBS, United Pasok Momogun Kadazandusun Murut Organisation (Upko) was also unhappy with the Federal Government’s decision to give Petronas the go-ahead to build the gas pipeline to send gas to Bintulu.

The party’s president, Tan Sri Bernard Dompok, had said that Sabahans have been dispirited by the current situation where the SOGT project was seen as not beneficial to Sabahans except for the landowners involved.

He pointed out that although Sabah is an oil and gas producing state, there is no related activity whatsoever to suggest that. There is no refinery, no university and no petro-chemical or other related industries in the State.

Dissatisfaction has brewed up from among State Umno leaders too, with Foreign Minister Datuk Anifah Aman taking Petronas to task on the poor participation from among local companies in the State’s oil and gas industry.

The Kimanis member of parliament firmly told Petronas to ensure more locals could benefit from the industry or their presence in the State shall be limited and controlled.

Sabah Progressive Party (SAPP) had also joined the chorous, rejecting the idea of piping gas from Kimanis to Bintulu as ‘ironic and unnecessary’.

Its president, former chief minister Datuk Yong Teck Lee, said the State should not send gas to Sarawak only to buy it back for fuelling the power plants needed to address its electricity woes.

Natural gas to be landed at Kimanis will be piped through a RM1.6 billion 500km pipeline to Petronas’s LNG complex in Bintulu.

The complex, with a production capacity of 25 million tonnes per annum, is one of the biggest of its kind in the world and exports LNG to three lucrative markets, namely Japan, South Korea and China.

With Sabah in need of the product to run its power plants, there were concern that the State may have to compete with these international buyers, who are able to offer much higher prices.


(News sources:The Borneo Post)

Link:http://www.theborneopost.com/?p=130325