SPEECH BY THE RIGHT HONORABLE CHIEF MINISTER SABAH, DATUK SERI PANGLIMA MUSA HAJ.I AMAN, AT THE SIGNING CEREMONY OF SHAREHOLDERS AGREEMENT (SHA) BETWEEN PETRONAS GAS BERHAD AND YAYASAN SABAH FOR THE DEVELOPMENT OF A 300MW GAS-FIRED POWER PLANT IN KIMANIS, PAPAR AT TANJUNG ROOM 2 & 3, SHANGRI-LA TANJUNG ARU, KOTA KINABALU, ON 24TH NOVEMBER 2008

I am pleased to be here today to witness the signing of the Shareholders Agreement between Petronas Gas Berhad and Yayasan Sabah Group. Today’s signing for the development of the Kimanis Power Plant project marks an important milestone in our efforts to improve power supply in the State.

 

Gas which will land at the Sabah Oil and Gas Terminal (SOGT) in Kimanis will be used to fire this 300 megawatt plant which will benefit the people, especially those who are living on the west coast of the state when this additional power is channelled to an existing grid system. By having better electricity supply, Sabah can also push for more investment for its industrial sector and other development initiatives which aim to bring growth in the long run.

 

I wish to state here that the Government is concerned about power shortage and is committed in doing what it can to improve the situation. Allow me to assure the people of Sabah that we are not sitting on our laurels and instead, we are working hard with parties such as Petronas to make sure that there will be sufficient power supply for the people and for development requirements. We are constantly looking for solutions as we understand that demand for electricity will continue to rise not just in the more developed urban centres, but also in outskirts and a large number of rural areas.

 

Sabah has been an oil and gas producer for a long time and in the last six years, new discoveries were made in deepwater areas off the coast of the State. Although oil and gas found off Sabah is considered as a national resource, the State too is serious about developing its own oil and gas industry. This is one way of diversifying our economy, creation of supporting industries and employment opportunities for locals. Returns from this lucrative industry could also be used to a certain extent for poverty eradication programmes in Sabah.

 

The State Government has been in discussions with Petronas since 2006 on the concept for a petrochemical plant that includes a masterplan for downstream gas industries. We intend to work closely with Petronas to develop all possibilities in the oil and gas sector, including in downstream industries. The fact that we have not publicised all these initiatives does not mean that we are not doing anything. All announcements on government plans will be done at an appropriate time when key aspects of projects have been finalised and can be implemented. We do not want to make announcements for political mileage or vested interests.

 

As an update, state agenices like Yayasan Sabah are currently working closely with Petronas to develop petrochemical projects such as the ammonia and urea plant. A comprehensive study undertaken by Petronas on the development of the oil and gas industry in line with requirements of the Sabah Development Corridor is expected to be ready by the end of this year. We are eagerly waiting for the outcome of the study and we want to assure Petronas that the State will give its full support for Petronas to invest in Sabah.

 

We also welcome Petronas’ commitment to invest billions of ringgit in developing the SOGT in Kimanis and we have the highest confidence that this small town on the state’s west coast will be the future catalyst of growth for the oil and gas industry in Sabah. It is my hope that this investment will bring more development in the area and that the spin-offs will eventually trickle down to the local community.

 

Human resource development is an important factor in developing the oil and gas sector. We need highly skilled people to work in this sector and towards this end, we are looking forward for the establishment of a training centre at the SOGT. Those who have been trained can be absorbed for the SOGT, the Kimanis power plant and for other downstream industries. This also fits in well with one of the aims of the Sabah Development Corridor, which is to create 900,000 jobs by the end of the plan in 2025.

 

Today’s signing is very significant as it marks the first project in Sabah to utilise the gas which will land at the SOGT. It is our hope that more projects will come on stream after this to make use of gas from Sabah’s own fields.

 

I would like to congratulate the hardworking members of the steering committee from Petronas Gas Berhad and Yayasan Sabah who are doing their level best to swiftly implement the project. The key success factors crucial for the project start-up are already in place, and I understand that the project will be fast tracked by both parties in view of the need to provide more power for consumers and for Sabah’s industrial development.

 

Thank you.