Speeches
Ground Breaking Ceremony for Sarawak Petchem Methanol Project
Deliver on 18 Sep 2019

Click here for Ground Breaking Ceremony for Sarawak Petchem Methanol Project in Tanjung Kidurong, Bintulu pdf files.

 

TALKING POINTS FOR
YAB CHIEF MINISTER OF SARAWAK
IN CONJUNCTION WITH THE
GROUND BREAKING CEREMONY
FOR SARAWAK PETCHEM
METHANOL PROJECT
IN TANJUNG KIDURONG,
BINTULU, SARAWAK
11th September 2019; 10.00 am.

INTRODUCTION

A very good morning to all of you,

First of all, I would like to thank Sarawak Petchem for inviting me to officiate at the Ground Breaking Ceremony for their proposed Sarawak Methanol Project here in Tanjung Kidurong, Bintulu, Sarawak.

I am much honoured to be invited and delighted to be here in this auspicious event which I believe everybody present here also feel the same.

This Project marks another significant milestone, not only in our quest to industrialise the State, but more importantly the realization of the state’s own vehicle to venture into the Oil & Gas Industry, particularly in the downstream Petro-Chemical sector.

This noble effort by Sarawak Petchem is indeed most welcome as we set out on a journey towards more downstream activities in our oil and gas industry in Sarawak.


SARAWAK ECONOMY


Sarawak aspires to be a developed State by the year 2030. It is just a decade away to reach the destination. The State government under GPS and its entire machinery together with the participation of the private sectors are putting in all the efforts necessary to ensure Sarawak can achieve a developed status as targeted.

The growth of Sarawak’s economy is partly driven by the Oil & Gas Industry. I am confident that further value-added downstream business through the development of the petro-chemical industry would be a major economic engine of growth for Sarawak in the next five to 10 years.

We are also confident that Sarawak is able to attract investment in the O & G downstream sector given our track record in FDI in the last decade or so. Sarawak’s ability to attract about RM30billion in investment since the inception of SCORE is proof that Sarawak is also capable of venturing into the oil and gas industry.

Currently, our economy is the third largest in the country after Selangor and Federal territory of Kuala Lumpur. In 2018, our Gross Domestic Products (GDP) was RM129.7 billion.

In order to expand our economy further, we need to increase value addition activities in all sectors of our economy. This will be done through industrialization by shifting to higher value-added activities, undertaking productivity driven growth initiative and application of advanced technology.

To realize this objective, we are also focusing on the downstream development of one of the key economic sectors of the State’s economy, which is the oil and gas sector. In fact, oil and gas has been identified as one of the 10 priority industries in SCORE.


CONTRIBUTION OF THE OIL & GAS SECTOR


Sarawak is reported to hold the largest share of the remaining Malaysia gas reserve at 54% and one-third of the country’s remaining oil reserve at 29%.


SHIFT TOWARDS HIGHER VALUE ADDED PETRO-CHEMICAL INDUSTRIES

We are not contented with the existing development of the oil and gas industry in the State. The reason being, our oil and gas products are still commodity base meant for exports. For example, the production of Liquefied Natural Gas, ammonia and urea utilizing natural gas as the feedstock for the industry. The irony is that the value-added activities are done abroad utilizing our natural gas as raw materials in their petro-chemical industries.

We want to maximize the oil and gas sector’s contribution to the State’s economy. In doing so, we want Bintulu to be another petro-chemical hub in Malaysia by inviting petro-chemical industries set up their Plants in Sarawak.

To do this, we will be intensely involved in developing the high value downstream products of oil and gas industries such as specialized and fine chemicals. In this regard, we will consider all feasible proposals to establish petro-chemical industries in the State and will facilitate them accordingly.

The Methanol and derivative project is one of the two initiatives of the Sarawak government to embark on more downstream value-adding petro-chemical industries. The other planned project is an ammonia and derivative Plant.

 

SARAWAK PETCHEMSDNBHD


As part of our industrialization agenda, we want to make high value petro-chemicals industry as one of the key drivers for the growth of the State’s manufacturing sector.
Established in June 2017, Sarawak Petchem will be the first Sarawak state owned company that produces methanol, with an annual capacity of 1.7 million metric tons per annum (mtpa).

The decision for the establishment of Sarawak Petchem is timely due to abundance of natural gas as feedstock for the development of a mega Methanol Plant.
The Plant is expected to come on stream in 2023 and will receive 160 million standard cubic feet per day (MMSCFD) of natural gas feedstock from Petronas.
I am happy to note the involvement of Petronas in this Project through:
Sales & Purchase Agreement (SPA) of Methanol
Gas Supply Agreement (GSA)

c.       Operations & Maintenance Support (O&M) on Capability Building
The Sales & Purchase Agreement (SPA) was signed in December 2018 for the sale of Methanol.
We will witness The Gas Sales Agreement (GSA) Exchange of Documents today during this Ground Breaking Ceremony.
The Memorandum of Understanding (MoU) for Operations & Maintenance Support on Capability Building has been executed in June 2019.

 

IMPACT OF SARAWAK PETCHEM METHANOL PROJECT

This Project will undoubtedly be a catalyst to further transform Bintulu from the current world-renowned LNG gas producer to a Petro-chemical hub with future downstream value-added integrated petrochemical complex.
This will add multiple values to our natural resources which will benefit the state economically derived through its value chains.

The Project will generate job opportunities, both during the construction of the mega project which is anticipated to have a total workforce that could reach 4,000 workers and about 300 staff during the operation of the Plant. Not to mention the spin off from this plant operation for other opportunities including its services and maintenance.
With state of the art and high technology, the Plant will require competent personnel, who are mostly engineers, technicians, operators and specialists to operate it. This will provide employment opportunities for our potential job seekers.

Now it is the policy of the state government that any new finding of gas resources in Sarawak, 40 to 50% must be retained as feedstock for industries in the state.

 

CONCLUSION

Rest assured that we will provide the necessary assistance required to ensure the success of this project.

On this note, I therefore, officially declare the launching of Ground Breaking Ceremony for Sarawak Petchem Methanol Project in Kidurong, Bintulu, Sarawak.

Speeches By: YAB Datuk Patinggi (Dr) Abang Haji Abdul Rahman Zohari Bin Tun Datuk Abang Haji Openg