09 November 2008

Kimanis-Bintulu gas pipeline project - On!

Dear Reader,

Thank you for dropping by PetrolMalaysia.com. In this article we examine the Kimanis-Bintulu gas pipeline project.

On 1st Nov 2008, Prime Minister YAB Dato Seri Abdullah Ahmad Badawi announced at the 23rd UPKO congress that the Kimanis-Bintulu gas pipeline project was to go ahead. (Source: Malaysiakini, Abdullah's U-turn on gas pipeline project, 3rd Nov 2008) The Prime Minister had announced on 31st May 2008 that the project would be scrapped. However on 10th Oct 2008, Tan Sri Bernard Giluk Dompok noted that Petronas was proceeding with implementing the project, in disregard of the Prime Minister's earlier promise that it would be scrapped.

Basic Facts
What: The Government plans to build a pipeline from Kimanis (Sabah) to Bintulu (Sarawak). Prime Minister YAB Abdullah Badawi has stated that only surplus gas would be transported from Kimanis to Bintulu. (Source: Malaysiakini, ibid.) He also said that sufficient gas would be allocated to meet the needs of Sabahans.

Length: Most reports state that the pipeline is planned to be 500 km long. (Source: Malaysiakini @ 3rd Nov 2008, Daily Express News @ 2nd Nov 2008, The Star Online @ 4th Nov 2008) However an article by The Star dated 30th June 2008, reproduced on the UPKO website, states that the pipeline will be 480 km long. (link) The planned pipeline would run approximately 90 km in Sabah and the remaining 422 km in Sarawak. (Source: The Star Online, Dialog JV gets RM1.6bil Sabah-Sarawak gas pipeline job, 7th Mar 2008)

Price: Malaysiakini (3rd Nov 2008) states the cost will be RM3 billion whereas The Star Online (4th Nov 2008) states that it is "worth" RM1.5 billion. However the article on UPKO's website by the Star (30th June 2008) quotes Petronas vice-president of gas business Wan Zulkifli Wan Arifin that the project would cost RM390 million.

Who: Tan Sri Bernard Giluk Dompok, president of UPKO, has been most vocal against the pipeline project. He wants the project to be scrapped so that Sabahans can partake in the oil and gas industry. (Source: The Star Online, Dompok to raise gas pipeline issue with PM, 4th Nov 2008).

When: The project is expected to complete by 2011. (Source: The Star Online, ibid.)

Economics: The gas, after being processed at Bintulu, is expected to be sold to Korea and Japan. (Source: The Star Online, ibid.)

Prime Minister Abdullah Badawi has promised that the state government would get royalties, and Petronas would build a natural-gas powered station in Kimanis. (Source: The Star Online, Upko determined to get gas pipeline scrapped, 6th Nov 2008)

On 7th Nov 2008, Minister in the Prime Minister's Department Tan Sri Bernard Dompok agreed to the setting up of the pipeline as the Prime Minister had agreed to set up a full fledged petrochemical industry in Sabah at the same time as the construction of the pipeline. He was also assured that only "excess gas" would be sent to Sarawak via the pipeline. (Source: The Star Online, Petrochemical industry to be set up in Sabah, 7th Nov 2008) (Source: The Star Online, Controversy resolved, Sabah to get petrochemical industry, 8th Nov 2008)

Not acceptable to everyone
PKR (Parti Keadilan Rakyat) vice-president Datuk Dr Jeffrey Kitingan said the pipeline project should be scrapped and a real petrochemical plant set up. (Source: Daily Express Sabah, PKR claims Dompok achieved nothing, accessed 9th Nov 2008)

Sabah UMNO leader Datuk Ghapur Salleh has also questioned whether the promise of setting up a petrochemical industry, would be delivered. He noted that the ruling coalition had reneged their promises before. (Source: The Star Online, ibid.) Vast areas of land had been allocated to federal agencies to be developed by settlers, but were ultimately awarded to private companies for timber logging.

SAPP (Sabah Progressive Party) president Datuk Yong Teck Lee has also suggested that the pipeline be routed from Kimanis to Tawau to allow Sabahans to reduce reliance on coal as a source of industry. The pipeline would be shorter. He said, "It does not make sense for Petronas to pipe Sabah’s natural gas 500km to Bintulu via a RM3bil pipeline and make Sabah import hydroelectric power from Sarawak." (Source: The Star Online, Yong: Better energy options for Sabah, 9th October 2008)