Transforming Challenges Into Opportunities by SOGDC

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TRANSFORMING

CHALLENGES INTO

OPPORTUNITIES

ABDUL KADIR ABDULLAH

26 th

May 2014

Quotations from YAB CM

…………………………….In response to the numerous mega projects embarked by PETRONAS in Sabah amounting to a staggering billions of ringgit, YAB CM had this to say at the 2 nd

SOGCE

“Let me assure you that the State Government is fully committed to the development of the oil and gas industry in Sabah. We constantly engage with the Federal

Government to discuss provision of funds for physical development of infrastructure and industrial facilities, and with PETRONAS on matters such as gas supply. Sabah will also continue to work with PETRONAS and the Malaysian

Investment Development Authority (MIDA) to attract investors to establish oil and gas industrial activities in

Sabah, apart from our own efforts in nurturing local investments”.

The presentation today is therefore about……..

A ‘Report Card’ of the Year that Was!

Taming the Challenges

The SOGIP Master Plan –

Forging the Partnerships

What lies Now and Ahead-

Creating the Opportunities

According to Merriem Webster dictionary it is about a complete or major change in someone’s appearance, form, etc

?

The project site and the condition of the area where SOGIP was to be located was described by consultant as….

.

The proposed SOGIP site is approximately 1646 hectares or 4, 065 acres in size.

The area is presently bare of any forest stand.

The existing site condition is flat, overgrown with shrubs, bushes and other vegetation. A large part of the area is greatly sandy and some part as swampy.

Mangrove can also be found at the northern section of the site.

Utility services for water and electricity are not available in the site

.

AND YET…IT WAS UNDER THIS CONDITION THAT PETRONAS

DECIDED TO LOCATE THEIR MEGA AMMONIA AND UREA

PROJECT (SAMUR) WORTH STAGGERING RM4.5 BILLION

SAMUR PROJECT IN PROGRESS

What are these challenges that needed to be overcome?

From SOGIP’s perspective, the challenges come in three forms….

?

Infrastructure

& Utilities

Supporting

Facilities

INFRASTRUCTURE & UTILITIES

Absence of common port facilities in SOGIP

Absence of electricity transmission line (275KVA) to SOGIP

Inadequate water supply for industrial use

Site is yet to be prepared for industrial activities

Absence of dual carriage way to cater for large cargo movement

SUPPORTING FACILITIES

Inadequate housing

Lack of public transport

Absence of railway services

Absence of commercial airport (nearest airport in KK)

Lack of recreational areas (nearest in Labuan and Brunei)

Lack of accommodation for business travellers (nearest in

Lawas)

How Did We

Respond To The

Needs of SAMUR?

Water Treatment Plant

Mesapol Water Treatment Plant

Capacity

4

MLD

Current demand: 11 MLD

SAMUR requirement : 27 MLD

New Water Treatment Plant

Capacity

40

MLD

- To be completed by Q1 2014

- To cater for SAMUR

– 27 MLD

Total Capacity by 2014

59

MLD

Kg. Ulau Water Treatment Plant

Capacity

15

MLD

NEW WATER

TREATMENT PLANT

DESIGNATED FOR

SOGIP – Scheduled to be completed June 2014

External Access Road

Internal Infrastructure –Roads, Drainage,

Street Lightings, Landscape, ICT

Approval of 1,000 hectares of

“SEA-LAND” for jetty and port activities

Jetty for SAMUR

Fund for transmission line from Kimanis to SOGIP

A Conceptual Maritime Master Plan

OBVIOUSLY, WITH A

MAMMOTH PROJECT LIKE

SOGIP THERE ARE A LOT

MORE TO DO.

BUT THE GREAT JOURNEY

HAS JUST BEGUN!

The greatest challenge was of course………..

?

PETRONAS

The Early Days

But Today…

PARTNERSHIP IN DEVELOPMENT

THE SABAH STATE GOVERNMENT TOGETHERWITH THE FEDERAL AGENCIES AND

PETRONAS FORMED A SMART PARTNERSHIP TO DEVELOP THE OIL AND GAS

RESOURCES AND LAND IN SIPITANG

SABAH

FEDERAL

AGENCIES

PETRONAS

=

SOGIP

The birth of the

Master Plan

PETRONAS plans to develop natural gas to primary fertilizer and encourage the development of downstream value added products.

Natural Gas composition in Peninsular and

Sabah

Composition Peninsular Sabah

Methane

Ethane

Propane

Butane

C5 +

Inert Gas

79%

11%

5%

3%

2%

-

91%

4%

2%

1%

0.1%

1.9%

Methane

Rich

Natural

Gas

Ammonia is a more viable petrochemical route due to regional and local market demand as well as volume availability

Methanol

Oversupply of market

Insufficient gas volume for world scale plant

Ammonia

Caprolactam

Ammonium

Sulphate

Diammoniu m

Phosphate

Ammonium

Nitrate

Urea

Ammonium

Chloride

NPK

Melamine

UF

Fertilizer: agriculture

Fertilizer: palm/rubb er

Fertilizer: cash crops

Artificial fibre

Power

Generation

Power demand in Sabah is limited

100mmscfd = 600 MW

Note : ethane volume is not sufficient to develop ethylene and derivatives complex

UF – Urea Formaldehyde

Huge local demand

INVESTMENT

SCENARIO

Whilst PETRONAS plans to position

Petronas plans to position SOGIP as

Premier Oil and Gas Industrial Park of Choice for Agro-based

Petrochemical in Asia Pacific

Base Feedstock

SAMUR

Downstream Urea Derivatives : i.

NPK ii.

iii.

Melamine

Urea formaldehyde resin

New

Ammonia

Plant

Downstream ammonia derivatives : i.

Ammonium Nitrate ii.

iii.

Diammonium Phosphate

Ammonium Chloride iv.

v.

Ammonium Sulphate /Caprolactam

CO2 Derivatives i.e. Acetal Resins, Dry

Gas, EOR

Fertilisers chain will bring approx. net investment value of

RM9.57 Billion and 5,370 direct and indirect jobs

SOGDC plans to invite other investors to invest in other industries

SMIs

Oil Tankage/Ship repairs

/Methanol Derivatives

Housing/

Hotels/Shopping complexes

Reticulation /Gas Distribution

Centralised Utilities Facilities (CUF

)

Road and Infrastructure, Port and

Jetties, Storage and Warehouse

Central Water Supply

x

Vs

NEXT SESSION

DR. CHUAH CHEN HENG

Natural Gas

(91% Methane)

SOGIP Petrochemical /

Pharmaceutical Hub

Ammonia

NPK/Melamine

/ Urea

Formaldehyde

Methanol

Urea

Ammonia

Derivatives

Methanol To

Olefin Process

Chemicals

+

PALM Based

Products

Polyplastics

Pharmaceutical

Products

Opportunities from METHANOL

DERIVATIVES

Formaldehyde

Formic Acid

Dimethoxymethane

Methyl Methacrylate

Methyl Tertiary Butyl Ether (MTBE)

Methanol

Acetic Acid

N,N-Dimethylacetamide (DMAC)

Dimethylformamide (DMF)

Chloromethane

Dimethyl Terephthalate (DMT)

1.Pentaerythrito

2.Trimethylolpropane (TMP

3.1, 4-Butanediol (BDO)

4.Urea Formaldehyde Resin (UF)

5.Phenolic Resin

6.Polyformaldehyde Resin (POM)

7.Melamine-Formaldehyde Resinl

1.Poly(Methyl Methacrylate)

(PMMA)

2.Acrylic Resin

1.Glyceryl Triacetate

2.Ethyl Acetate (EAC)

3.Butyl Acetate (BAC)

4.Vinyl Acetate Monomer

5.Chloroacetic Acid

6.Isopropyl Acetate (IPAC)

7.Acetic Anhydride

1.Dichloromethane

2.Chloroform

3.Carbon Tetrachloride

4.Methylchlorosilane

1.Polyethylene Terephthalate (PET)

1.Unsaturated Polyester Resin (UPR)

2.Alkyd Resin

3.Polyurethane Resin (PU)

4.1,4 - Butyrolactone (GBL)

5.Tetrahydrofuran (THF)

6.Polyester Polyol

7.Polyvinyl Pyrrolidone (PVP)

8.Polyester Resin

9.Polybutylene Terephthalate (PBT)

1.Polyvinyl Alcohol (PVA)

2.Polyvinyl Acetate

Confidential

EMPLOYMENT OPPORTUNITIES IN SOGIP

Technical

Chemical and Process

Engineers

Mechanical Engineers

Design Engineers

Operations Engineers

IT Analyst

Electrical Engineers

SHE Specialists

Turbo Machinery

Engineers

Business and General

Management

Business Graduate

Law Graduate

Human Resources team

Medical Specialists

Accounting and

Control Analysts

Corporate Planners

Corporate Affairs

Specialists

Controllers

Asset Management

Team

Skilled Technicians

Operators

Instrument and

Electrical Specialists

Electrical Chargemen

Mechanical and

Maintenance

Specialists

Turbo Machinery

Specialist

IT Specialists

Logistics Team

Welding Specialists

(various levels)

Construction Team

(Supervisors, fitters, riggers, etc…)

Design Draftsmen

Office Administrative

Support Staff

BUSINESS OPPORTUNITIES IN SOGIP

International Business participations

 New technologies

 Transfer of Knowledge

Local business participations

 JV opportunities

 Develop local human

Capitals

SMEs Opportunities

 Develop local businesses

New Technologies

Project Development

Design and Engineering

Constructions

Start-up and Commissioning

Procurement

Manufacturing / Production operations

Services

Operations and Maintenance

Equipment Services

IT services

Logistics Services

Warehousing and Packaging

Port Services

DEVELOPMENT OPPORTUNITIES IN SUPPORT SERVICES IN

AND AROUND SOGIP AND SIPITANG

Infrastructures improvement

Community Services

Higher Educations

 University

 Research &

Development

Recreations and

Healthy Entertainments

Improvement in infrastructure

 Logistics & transportation

Pan Borneo Highway

Railway link

Air freighting services

Power Supply Service

Water Supply Management and Services

Port Services

Community Services

 Heath care for local and new arrivals participating in the petrochemical industries

New and improve hospitals equipped with modern facilities to handle emergency cases

Schools

New schools

High grading of the facilities

Institute Of Higher Education

University

Technical Colleges

Recreation and Healthy Entertainment Developments

Improve esplanade for community interactions

Parks for healthy lifestyle activities

Libraries for inquisitive minds

What lies beneath those challenges are actually host of business opportunities

ENABLERS

Port

Utilities : CUF, Electricity Transmission line

Waste Management

Logistic and Warehouse

Water Supply

Internal infrastructure

(Roads, street lighting, drainage, ICT)

Note :

Total Cost : RM315mil

Approved by UKAS: RM195mil

ESTIMATED EXPENDITURE (mil)

ESTIMATED COST

RM mil

1,530

900

200

100

700

315

3,745

Development plan for type of investments in SOGIP

INDUSTRIES

PETROCHEMICAL & FERTILIZERS

MARKISA (Ammonia Plant)

Ammonia Derivatives

Urea Derivatives

Methanol Derivatives

Bio-based Industries

BULK STORAGE & HEAVY INDUSTRIES

Bulk Storage

Bulk Products Distribution Terminal

Oil Refinery

Fabrication Yard

Ship Repair Services

SUPPORTING INDUSTRIES

Transportation

Warehouse (Storage Facilities)

Packaging

Printing

SMI

UTILITIES & INFRASTRUCTURE

Road, Streetlights & Drainage

Electricity , Water & ICT

Centralized Utilities Facility (CUF)

Gas Reticulation

Port & Jetty

Phase 1

Phase 2

Phase 3

Phase 4A

Phase 4B

2014 2015

Phase 1

2016 2017 2018 2019 2020

Phase 2

2021 2022 2023 2024

Investments in SOGIP

Phase 1: A. Planned investment

1.Fertilizers

Ammonia Plant

Ammonia Derivatives

Urea Derivatives

2.Utilities

Centralized Utilities Facility (CUF)

Gas Reticulation

3.Bulk Storage

Bulk Oil Storage

Bulk Products Distribution

Terminal

4.Other Investment

Bio-based industries

Fabrication (shipping, onshore &

• offshore structures)

Refinery

Phase 1: B. Planned Development by SOGIP

1.Infrastructure

Road & Street Lights

Drainage

Port and Jetty

Telecommunications

Phase 2: Subject to future availability of gas

1.Methanol Derivatives

2.Ammonia Derivatives

3.Urea Derivatives

4.Other heavy industries

Thank You

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