PowerPoint Presentation

TRANSFORMING CHALLENGES INTO OPPORTUNITIESABDUL KADIR ABDULLAH26th 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 2nd 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

3Transform?According to Merriem Webster dictionary it is about a complete or major change in someones appearance, form, etc

?

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

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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 YETIT 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 SOGIPs perspective, the challenges come inthree forms.Infrastructure & UtilitiesSupporting Facilities?INFRASTRUCTURE & UTILITIESAbsence of common port facilities in SOGIPAbsence of electricity transmission line (275KVA) to SOGIPInadequate water supply for industrial useSite is yet to be prepared for industrial activitiesAbsence of dual carriage way to cater for large cargo movement

SUPPORTING FACILITIESInadequate housingLack of public transportAbsence of railway servicesAbsence 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

Current demand: 11 MLDSAMUR requirement : 27 MLDTotal Capacity by 2014 59MLDNew Water Treatment PlantCapacity 40MLD

To be completed by Q1 2014To cater for SAMUR 27 MLDKg. Ulau Water Treatment PlantCapacity 15MLDMesapol Water Treatment PlantCapacity 4MLD

NEW WATER TREATMENT PLANT DESIGNATED FOR SOGIP Scheduled to be completed June 2014

External Access Road

Internal Infrastructure Roads, Drainage, Street Lightings, Landscape, ICT

Jetty for SAMUR

Approval of 1,000 hectares of SEA-LAND for jetty and port activities

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 TodayPARTNERSHIP IN DEVELOPMENT=SOGIPSABAHFEDERALAGENCIESPETRONAS

THE SABAH STATE GOVERNMENT TOGETHERWITH THE FEDERAL AGENCIES AND PETRONAS FORMED A SMART PARTNERSHIP TO DEVELOP THE OIL AND GAS RESOURCES AND LAND IN SIPITANGThe birth of the Master PlanCompositionPeninsularSabahMethane79%91%Ethane11%4%Propane5%2%Butane3% 1%C5 +2%0.1%Inert Gas-1.9%Methane Rich Natural Gas MethanolAmmoniaNatural Gas composition in Peninsular and SabahAmmonia is a more viable petrochemical route due to regional and local market demand as well as volume availabilityAmmonium NitrateDiammonium PhosphateCaprolactamAmmonium Sulphate

Artificial fibreFertilizer: palm/rubber Fertilizer: cash cropsUreaPower GenerationPower demand in Sabah is limited100mmscfd = 600 MWNote : ethane volume is not sufficient to develop ethylene and derivatives complex UF Urea FormaldehydeOversupply of marketInsufficient gas volume for world scale plant

Fertilizer: agricultureHuge local demandNPKAmmonium ChlorideMela-mineUFPETRONAS plans to develop natural gas to primary fertilizer and encourage the development of downstream value added products.INVESTMENT SCENARIOPetronas plans to position SOGIP as Premier Oil and Gas Industrial Park of Choice for Agro-based Petrochemical in Asia PacificCentral Water SupplyRoad and Infrastructure, Port and Jetties, Storage and WarehouseCentralised Utilities Facilities (CUF)SAMURDownstream Urea Derivatives :NPKMelamineUrea formaldehyde resinSMIsDownstream ammonia derivatives :Ammonium NitrateDiammonium PhosphateAmmonium ChlorideAmmonium Sulphate /Caprolactam CO2 Derivatives i.e. Acetal Resins, Dry Gas, EORReticulation /Gas DistributionNew Ammonia PlantBase Feedstock Whilst PETRONAS plans to position Oil Tankage/Ship repairs/Methanol DerivativesFertilisers chain will bring approx. net investment value of RM9.57 Billion and 5,370 direct and indirect jobsSOGDC plans to invite other investors to invest in other industriesHousing/ Hotels/Shopping complexes27

VsxNEXT SESSION

DR. CHUAH CHEN HENG

SOGIP Petrochemical / Pharmaceutical HubMethanolMethanol ToOlefin ProcessPolyplasticsChemicalsPALM Based ProductsPharmaceuticalProducts+AmmoniaUreaAmmonia Derivatives NPK/Melamine / Urea FormaldehydeNatural Gas(91% Methane)MethanolFormaldehydeFormic AcidDimethoxymethaneMethyl MethacrylateMethyl Tertiary Butyl Ether (MTBE)Acetic AcidN,N-Dimethylacetamide (DMAC)Dimethylformamide (DMF)ChloromethaneDimethyl Terephthalate (DMT)PentaerythritoTrimethylolpropane (TMP1, 4-Butanediol (BDO)Urea Formaldehyde Resin (UF)Phenolic ResinPolyformaldehyde Resin (POM)Melamine-Formaldehyde ResinlPoly(Methyl Methacrylate) (PMMA)Acrylic ResinGlyceryl TriacetateEthyl Acetate (EAC)Butyl Acetate (BAC)Vinyl Acetate MonomerChloroacetic AcidIsopropyl Acetate (IPAC)Acetic AnhydrideDichloromethaneChloroformCarbon TetrachlorideMethylchlorosilanePolyethylene Terephthalate (PET)Unsaturated Polyester Resin (UPR)Alkyd ResinPolyurethane Resin (PU)1,4 - Butyrolactone (GBL)Tetrahydrofuran (THF)Polyester PolyolPolyvinyl Pyrrolidone (PVP)Polyester ResinPolybutylene Terephthalate (PBT)Polyvinyl Alcohol (PVA)Polyvinyl AcetateOpportunities from METHANOL DERIVATIVESConfidentialTechnicalChemical and Process EngineersMechanical EngineersDesign EngineersOperations EngineersIT AnalystElectrical EngineersSHE SpecialistsTurbo Machinery EngineersBusiness and General ManagementBusiness GraduateLaw GraduateHuman Resources teamMedical SpecialistsAccounting and Control AnalystsCorporate PlannersCorporate Affairs SpecialistsControllersAsset Management TeamSkilled TechniciansOperatorsInstrument and Electrical SpecialistsElectrical ChargemenMechanical and Maintenance SpecialistsTurbo Machinery SpecialistIT SpecialistsLogistics TeamWelding Specialists (various levels)Construction Team (Supervisors, fitters, riggers, etc)Design DraftsmenOffice Administrative Support Staff

EMPLOYMENT OPPORTUNITIES IN SOGIPInternational Business participationsNew technologiesTransfer of KnowledgeLocal business participations JV opportunitiesDevelop local human Capitals

SMEs OpportunitiesDevelop local businesses New TechnologiesProject DevelopmentDesign and EngineeringConstructionsStart-up and CommissioningProcurementManufacturing / Production operations

ServicesOperations and MaintenanceEquipment ServicesIT servicesLogistics ServicesWarehousing and PackagingPort Services

BUSINESS OPPORTUNITIES IN SOGIPInfrastructures improvement Community ServicesHigher EducationsUniversityResearch & DevelopmentRecreations and Healthy Entertainments

Improvement in infrastructureLogistics & transportation Pan Borneo HighwayRailway linkAir freighting servicesPower Supply ServiceWater Supply Management and ServicesPort Services

Community ServicesHeath care for local and new arrivals participating in the petrochemical industriesNew and improve hospitals equipped with modern facilities to handle emergency casesSchoolsNew schools High grading of the facilitiesInstitute Of Higher EducationUniversityTechnical CollegesRecreation and Healthy Entertainment DevelopmentsImprove esplanade for community interactionsParks for healthy lifestyle activitiesLibraries for inquisitive minds

DEVELOPMENT OPPORTUNITIES IN SUPPORT SERVICES IN AND AROUND SOGIP AND SIPITANGENABLERSESTIMATED COSTRM milPort1,530Utilities : CUF, Electricity Transmission line900Waste Management200Logistic and Warehouse100Water Supply 700Internal infrastructure(Roads, street lighting, drainage, ICT)Note : Total Cost : RM315milApproved by UKAS: RM195mil315ESTIMATED EXPENDITURE (mil)3,745What lies beneath those challenges are actually host of business opportunities 35Phase 1: A. Planned investmentFertilizersAmmonia Plant Ammonia DerivativesUrea Derivatives

Utilities Centralized Utilities Facility (CUF)Gas Reticulation

3.Bulk StorageBulk Oil StorageBulk Products Distribution Terminal4.Other InvestmentBio-based industries Fabrication (shipping, onshore & offshore structures)Refinery Phase 1: B. Planned Development by SOGIPInfrastructureRoad & Street LightsDrainagePort and JettyTelecommunicationsPhase 2: Subject to future availability of gasMethanol DerivativesAmmonia DerivativesUrea DerivativesOther heavy industriesInvestments in SOGIPDevelopment plan for type of investments in SOGIPPhase 120232024202220212020201920182017201620152014Phase 2PETROCHEMICAL & FERTILIZERSBULK STORAGE & HEAVY INDUSTRIESINDUSTRIESSUPPORTING INDUSTRIESTransportationPackagingWarehouse (Storage Facilities)MARKISA (Ammonia Plant)PrintingUTILITIES & INFRASTRUCTURERoad, Streetlights & DrainageElectricity , Water & ICTCentralized Utilities Facility (CUF)Port & JettyPhase 1Phase 2Phase 3Phase 4APhase 4BOil RefineryFabrication YardGas Reticulation Bio-based IndustriesBulk Products Distribution TerminalAmmonia DerivativesUrea DerivativesMethanol DerivativesShip Repair ServicesBulk StorageSMI3636Thank You