Why send our gas to Bintulu?

Is the natural gas in Sabah to be piped to Bintulu in Sarawak, and are the crude oil and condensate also going to be piped, siphoned out of Sabah and exported to Bintulu? Are the crude oil, condensate and gas produced from Sabah going to be properly metered and accounted for? Sabahan already have no access or knowledge of its own precious petroleum sales? Where is the petroleum industrial development in Sabah after so many years of rich oil and gas production? There should be by now at least one oil refinery and one liquefied petroleum gas (LPG) plant being set up in Sabah.

According to hydrocarbons-technolgy.com, the Sabah Oil and Gas Terminal (SOGT) is a part of the Sabah-Sarawak Integrated Oil and Gas Project undertaken by Petronas Carigali in the state of Sabah and is being built on a 250 acre green field site in Kimanis, a township that lies 45 km from the city of Kota Kinabalu. The terminal will process oil and gas produced from the proximity of the region's offshore fields.

The Sabah terminal is expected to be operational in 2014. The capacity is equivalent to about 40% of Malaysia's crude oil production. The SOGT will serve the offshore fields including Gumusut / Kakap, Kinabalu Deep, East Kebabangan and Malikai.

The integrated project involves construction of an upstream infrastructure to process and tap offshore oil and gas reserves in the Sabah region, and process the produced resources. It includes offshore field development, construction of the SOGT and a 512km onshore pipeline called the Sabah-Sarawak Gas Pipeline.

Samsung Engineering was awarded the engineering, procurement, construction and commissioning (EPCC) contract of the SOGT. The RM2.44 billion ($770m) contract was signed in October 2010. Samsung Engineering partnered by a Malaysian construction company from Sarawak, Naim Cendera (NCSB Engineering), are to execute the project. Naim is responsible for the construction of support infrastructure such as roads, bridges, earthworks and site offices, (the company is allegedly linked to some Sarawak top politician).

The new terminal is needed because the crude oil terminal in Kg Kiansom, Labuan and the natural gas terminal in Kg Gayang do not have sufficient capacity to handle the increasing production of the oil and gas from the new fields.

Together with the liquefied natural gas (LNG) in current production, including the wells off the island of Labuan and the existing gas fields that are to be tapped and then piped to Bintulu via the new Kimanis-Bintulu Pipeline, the new gas reserve find of 550 billion standard cubic feet with an estimated daily production rate of 21 million standard cubic feet, as well as rumors of new oil-fields offshore Sandakan and Kudat and the much touted “find of the century” somewhere off the coasts of Sabah near Limbang and Brunei, oil and gas industry is here to stay and could play a very crucial and integral part of Sabah’s economic development and advancement in the future.

The RM4.6 billion 512 km Sabah-Sarawak Gas Pipeline project linking Sabah with Bintulu, will have a handling capacity of 1.3 Bcf/d of natural gas per day. A reported 500,000 cubic feet per day from the Gumusat-Kakap, Malikai and Kinabalu offshore fields of gas will be piped to the Bintulu complex to be exported as LNG. The point is again Sabah did not reap the full benefit from these precious natural resources but allow Sarawak to pocket a direct harvest. What has the Sabahan got to say about this?

The RM2.44 billion Sabah Oil and Gas Terminal (SOGT), under construction in Kimanis, Sabah, is expected to be completed by the end of 2013. It will receive the natural gas from the offshore oil fields, to process and to distribute the products. How will these benefit the Sabahan? The people in Sabah have the right to know, because this is belonging to them.

The investment on the new production facility and the gas pipeline could have been spent on new facilities in Sabah to process and refine our own crude oil and natural gas, instead of sending via a 512 km pipeline overland to Bintulu. With the pipeline, Sabah has lost all the spin-offs in its economy that could be generated if the production facility were housed in Kimanis, Kota Belud, and Kudat in Sabah. The oil and gas industries will definite bring along massive development and economic growth in these areas. Just imagine what Kudat will be, if a LPG (Liquefied Petroluem Gas) plant is being set up in Kudat along with an oil refinery facility? Kudat will be better than Bintulu.