Kedah oil refinery project goes back to Yan...with bloated budget
By : Noor Adzman Baharuddin
Kedah’s mega RM50 billion oil refinery and pipeline project has become even bigger — with the budget for it soaring to a staggering RM83 billion. The RM33 billion increase is due to the decision to construct a man-made island to house the proposed refinery and storage facilities. Originally, the refinery and storage facilities were to have been built on reclaimed padi fields.
The proposed oil refinery and storage plant, will be set up in Yan district, as originally planned.
Menteri Besar Azizan Abdul Razak made the startling announcement after meeting the developers of the project at Wisma Darul Aman here today. The project will also be built on its original site of Yan instead of Gurun as suggested by Azizan.
Azizan said he agreed to bring the project back to Yan after listening to the counter proposals by the six investor. “I know I had announced that the refineries would be shifted to Gurun, but after hearing their counter-proposals, I have agreed to bring it back to Yan district, specifically Sungai Limau,” he told reporters after the meeting.
Azizan, who is also state assemblyman for Sungai Limau, said the investors had agreed to come up with the additional RM33 billion for the project.
He said instead of building refineries on prime padi fields in Sungai Limau and surrounding areas, the investors would build them on a four kilometre-square man-made island off the shores of the village.
“It will be safe and good for all. The padi fields and the people remain in Yan and they also stand to benefit from job and business opportunities once the project gets off the ground,” he said, insisting that the entire project would be called by its new name, the Kedah Hydrocrabon Hub, instead of ‘Yan Petroleum Industry Zone’.
The Pas-led state government had shelved the original plan to build refineries on land reclaimed from padi fields after it came into power following the March 8 general election. It had proposed that the refineries be built in Gurun and that the proposed construction of a 310km pipeline, meant to transport crude oil from Yan to Bachok in Kelantan, be shelved.
However, after the meeting, Azizan agreed with Trans Peninsula Petroleum Sdn Bhd’s plan to build the pipeline but it would only carry crude oil that would be processed by refineries to be built in Bachok.
Two other investors, Merapoh Resources Corporation Sdn Bhd and Hijaz refinery Sdn Bhd, would build the man-made island to house the refineries. Other players of the project are Pristine Oil (M) Sdn Bhd and KN Capital (M) Sdn Bhd. Another investor, SKS Refinery Sdn Bhd, would build an inland crude oil storage facility in Kuala Jerlun.
Under the original proposal, tankers from the Middle East would offload crude oil in Yan before it is channelled via a pipeline that runs across Yan, Pendang, Baling (in Kedah), Grik (Perak) and to a refinery in Bachok (Kelantan). Tankers would then ship the petroleum to the Far East, saving three days of voyage time without going through the Straits of Malacca.
However with the latest changes, Yan would still be the main port of call for the tankers but some of the crude oil would be processed on the man-made island before it is transported by smaller tankers to the Far East via the straits. Crude oil will also be transported via the 310km pipeline to refineries in Bachok.
Officials of the project said despite the huge increase in costs, they were confident of recouping their investments within a few years. They did not explain why there was a need for refineries in both Yan and Bachok, or how it made economic sense to process crude oil in Yan and then shipping it via the straits to the Far East. http://www.nst.com.my/Current_News/NST/Thu...icle/index_html