Half of new gas finding to be retained as feedstock for downstream industries — CM

Sarawak Petchem Sdn Bhd chairman Tan Sri Dr Abdul Aziz Husain (left) presenting a souvenir to Abang Johari.

BINTULU, Sept 11: Any new finding of gas resources in Sarawak, 40 to 50 per cent of the production must be retained as feedstock for the gas related industries in the state.

Chief Minister Datuk Patinggi Abang Johari Tun Openg said the policy of the Sarawak government was to ensure the state has enough gas feedstock to drive the downstream activities of the natural gas industries, particularly the petrochemical industries.

“Now it is the policy of the state government that any new finding of gas resources in Sarawak, 40 to 50 per cent must be retained as feedstock for industries in the state,” he pointed out when launching Sarawak’s first methanol plant at Tanjung Kidurong, here, today.

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

The chief minister said Sarawak were 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 utilising natural gas as the feedstock for the industry.

“The irony is that the value-added activities are done abroad utilising our natural gas as raw materials in their petrochemical industries,” he said.

He added that is was Sarawak’s intention to maximise the oil and gas sector’s contribution to the state’s economy by developing Bintulu into another petrochemical hub in the country by inviting petrochemical industries to 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 specialised and fine chemicals,” he said.

“In this regard, we will consider all feasible proposals to establish petrochemical industries in the state and will facilitate them accordingly,” he added.

The methanol and derivative project was one of the two initiatives of the state government to embark on more downstream value-adding petrochemical industries. The other planned project was an ammonia and derivative plant, he continued.

He expressed confidence that Sarawak would be able to attract investment in the oil and gas downstream sector, given Sarawak’s track record in foreign direct investment (FDI) in the last decade.

Sarawak was able to attract about RM30 billion in investment in the energy-intensive sector since the inception of the Sarawak Corridor of Renewable Energy Programme.

Established in June 2017, Sarawak Petchem will be the first state-owned company that produces methanol, with an annual capacity of 1.7 million metric tons per annum.

The plant, built by Samsung Engineering of Korea, is expected to come on stream in 2023 and will receive 160 million standard cubic feet per day of natural gas feedstock from Petronas. — DayakDaily