KOTA KINABALU 20th July, 2012: Sabah has become the first state in Malaysia to supply compressed natural gas (CNG) via a virtual pipeline system.
Chief Minister Datuk Seri Musa Haji Aman said the approach undertaken by Sabah Energy Corporation (SEC) would enable a wide spectrum of users to benefit from the project.
“It (project) is accessible to users who are located up to 70km fromSEC’s station at the Kota Kinabalu Industrial Park.
“I believe SEC is also currently exploring the possibility of bringingCNG to the east coast of Sabah and the Sipitang area,”
he said when launching the project here yesterday.
As SEC would offer the gas cheaper than other fuels, Musa said it would complement the state’s effort to make business activities in Sabah more cost competitive.
He also said CNG was a cleaner burning fuel compared to other types of fossil fuel and reduced pollution.
“This is very important when viewed from the context of the state government’s focus towards ensuring that our growth sectors practice initiatives that stress on environmental protection and sustainability.
“Such a move also fits in with our focus on promoting Sabah as an eco-tourism destination,” he added.
Meanwhile, the Chief Minister urged industries that used highly polluting fuels to seriously consider switching to natural gas so that everyone could enjoy a cleaner environment.
He also said he was pleased that SEC has signed an engineering, procurement, construction and commissioning (EPCC) contract with Galileo of Argentina and Frugas Synergy Sdn Bhd.
In addition, SEC also signed two natural gas sales and purchase agreements with Ching Kuan Holdings Sdn Bhd and Colourcoil Industries Sdn Bhd.
“I am sure a lot of effort was put into ensuring all required issues were resolved to the satisfaction of all parties concerned, and I commend SEC for making today’s launch a reality,” he added.
The Chief Minister added that currently the natural gas market handled by SEC was small and geographically scattered.
“Due to these factors, it is not economical for SEC to distribute natural gas through the conventional way of underground pipelines.
“This virtual pipeline is an alternative, and I am happy to note thatSEC has taken the initiative to introduce this technology in Malaysia,” Musa said.
“I believe SEC is currently exploring the possibility of bringing natural gas to the east coast of Sabah, and south to the Sipitang area. I encourage you to actively pursue these options as I would like to see the benefits of natural gas made available throughout the state,” he said.
From a macro level, he said oil that commanded a premium prices in the overseas market could be exported to bring in more foreign exchange to the country.
On the issue of oil and gas reserves, he said : “History tells us that in the case of our timber sector, Sabah did not take full advantage of the resource and instead focused on exporting round logs. We did not place enough emphasis on adding value to our timber, which could have created untold spinoffs for the state and the people.”
Today, the focus, he said, has shifted to the oil and gas sector “and so, we must not miss the opportunity of leveraging on benefits of these two resources through the creation of value-added sectors locally.”
Musa meanwhile stressed that the state government was committed to making the best use of oil and gas reserves found offshore of Sabah.
In order to achieve this goal, he said the state government was collaborating with Petronas to channel the benefit of oil and gas in invigorating the local economy where efforts were already materialising through several projects such as the Sabah Oil and Gas Terminal, the Sabah-Sarawak Gas Pipeline, Sabah Ammonia Urea Project (SAMUR) and the Sipitang Oil and Gas Industrial Park.
“To meet the demand for electricity and to ensure that it comes from cleaner resources, gas-fired power plants costing billions of ringgit are coming up in Kimanis and Lahad Datu, each with 300mw capacities, he added.
Musa also said oil and gas was an exciting industry and urged those keen to participate to play an active role as there were many opportunities – key among them would come from the downstream sector.
“I wish to see locals gaining from quality employment and the creation of new entrepreneurs as the sector grows in years to come,” he said.
He added that SEC has been given the task to be a key facilitator in Sabah’s efforts to maximise local participation in the oil and gas industry.
For the SAMUR initiative, SEC which had transformed into a dynamic and credible company since its establishment in 1981, has been appointed as an associate to the consortium running the project.
“With your track record, I am confident that you will play a significant role in Sabah’s efforts to maximise local participation in the oil and gas industry.
For the SAMUR initiative, SEC which had transformed into a dynamic and credible company since its establishments in 1981, has been appointed as an associate to the consortium running the project.
“With your track record, I am confident that you will play a significant role in Sabah’s future growth, specifically through the oil and gas sector. I am also happy to note that SEC has also consistently declared dividends to the state government and I wish you continued success,” said Musa.
The Chief Minister also encouraged SEC and other government-linked companies to constantly think out of the box and create ventured that would enhance their worth.
“Globalisation demands that we keep up with a fast paced world in order to remain competitive and relevant,” he said matter-of-factly.
Also present at the function were Deputy Chief Minister Datuk Dr Yee Moh Chai, SEC chairman Au Kam Wah and SEC executive officer Dato’ Harun Ismail. – PAUL MU