(Source: http://www.dailyexpress.com.my/local.cfm)

Kota Kinabalu: A China consortium is confident in the future of Sabah’s oil and gas industry for it is strategically located within a highly populated region where agriculture continues to fuel huge demand for petrochemical products.

The consortium of three companies – China National Complete Plant Import and Export Corporation (Complant), Sichuan Chemical Industry Holding (Group) Co. Ltd and China Chengda Engineering Co. Ltd, believes these are some of the strengths that can open up a world of opportunities for the State to explore.

“As agriculture is the main source of economy in South East Asia, there is a great demand for fertiliser,” Complant Chairman Liu Xueyi told Daily Express.

Liu led the consortium last week to sign a Memorandum of Understanding (MoU) with Sabah Oil and Gas Development Corporation Sdn Bhd (SOGDC) to undertake a feasibility study on the proposed production of urea and ammonia petrochemical development at the Sipitang Oil and Gas Industrial Park (Sogip).

The ceremony was witnessed by Industrial Development Minister Datuk Raymond Tan and Kota Kinabalu China Consul General Chen Peijie.

Sabah’s geographical location within the Asia Pacific region has been established as an attraction to oil traders and investors. While this is one of the reasons that has attracted the consortium’s interest to participate in developing the industry here, other than knowing that natural gas resource is also in abundance, government’s commitment remains a key factor for success.

“From our meetings with a number of government agencies, we understand that the Sabah government is very committed in developing the industry because it offers so much socio-economic benefits to the people. And the minister (Tan) has assured us that the government will give its support,” he said.

Tan had reportedly said that the government would work closely with the consortium and the China Consul General Office to ensure they have comfortable environment when investing in the State.

It was learned that the consortium had been in talks with local partners for about a year regarding the investment prior to the signing of the MoU.

He disclosed that the local partners are Sogip and Denrich Naluri Rezeki Sdn Bhd.

“We’re been in contact with them for about a year and based on our understanding ,they’re highly capable,” said Liu.

He said Complant, that was merged into China’s State Development and Investment Corporation as a its wholly-owned subsidiary company, has established friendly relationship with governments and industry and commercial sectors of over 100 countries and regions.

He said the company has also built a urea and ammonia plant in Bangladesh which until today stands as the biggest investment collaboration between the country and China. Overall, Complant has its name over 1,400 projects of various kinds around the globe.

The consortium’s feasibility studies, expected to take a few months, precede an agreement which is said to come with an exciting package to further spur the growth of the Sabah oil and gas industry.

If everything goes to plan, the consortium’s investment in the State will likely add firepower to its downstream plans in raising the value of the oil and gas resources and possibly stimulate many business ideas.

Sabah’s oil and gas industry nestled in the 1,600-hectare Sogip site is expected to attract new investments worth billions with the potential to create 30,000 new job opportunities when it is fully developed.

The availability of natural gas as feedstock from Sabah’s offshore production facilities is one of the many attractive proposals that enables Sogip to be well positioned to spearhead the development of the oil and gas industry in the State.

As of May this year, the Sabah Ammonia Urea (Samur) project that forms an integral part of Petronas’ overall downstream plans to optimise the value of the oil and gas resources found offshore Sabah, was reported to be 98 per cent ready and was expected to begin urea dropping as early as June.