The Pengerang Integrated Petroleum Complex (PIPC) is a one-stop complex for the oil and gas sector with RM69 billion worth of projects in the pipeline. Malaysia has been blessed as one of the fastest growing economies in the Asia Pacific region, thanks to our flourishing oil and gas sector which is set to become Asia’s oil and gas hub. With 409 oil and gas fields, Malaysia has the second largest reserves in South East Asia. It also has one of the world’s biggest LNG production facilities, making us the world’s third largest exporter of liquefied natural gas (LNG). This capacity coupled with our strategic location at the centre of South East Asia right between the growth markets of China and India makes Malaysia an ideal base for businesses to expand their Asian oil and gas operations.
Today, I had the opportunity to visit the Pengerang Integrated Petroleum Complex (PIPC), a national project of strategic importance. It was remarkable to see how a vision unfolds before your eyes. The Pengerang vision was the brainchild of the Economic Transformation Programme, created to be a one-stop-hub for a more dynamic and progressive oil and gas industry in Malaysia. In today’s modern world, we have one-stop complexes for almost everything and with that same idea in mind, Pengerang will help create value to the downstream oil and gas value chains by being a one-stop petroleum complex for Asia.
Pengerang which is poised to be Asia’s regional hub will house oil refineries, naphtha crackers, petrochemical plants as well as a liquefied natural gas (LNG) import terminal and a regasification plant. New high-value and high-demand products and by-products, such as polymers, pharmaceutical products and plastics, will be created from the refined feedstock.
In our goal to become a high-income nation by 2020, the PIPC project plays a key role in facilitating Malaysia’s aspirations of achieving a per capita income of US$15,000 by 2020. Such a target requires an annual increase in gross national income per capita of at least 6% a year. Our oil, gas and energy sector is one of the 12 growth areas identified to spearhead Malaysia’s rapid and on-track economic development. Pengerang will help to create an oil storage and trading hub and increase petrochemical output.
Yes, we have had our sceptics but we need to look at the bigger picture where Pengerang is indeed a necessity. Malaysia currently produces approximately 600,000 barrels of crude daily but our existing oil refining facilities in Kertih, Gebeng and Malacca are almost running at full capacity. The PIPC includes Petronas’ Refinery and Petrochemical Integrated Development Project (RAPID). RAPID would significantly increase our refining capacity when fully operational; allowing us to refine more local as well as imported crude oil.
The upsides of the RM5 billion investment on Pengerang’s independent one-stop terminal joint venture project between Dialog Group, Royal Vopak of Netherlands and the Johor State do not just stop there. With deepwater jetties (up to 24 metres), the terminal will be able to accommodate ultra large (ULCCs) and very large crude oil tankers (VLCCs), subsequently stimulating utilization of the facility by other global oil and gas companies. Pengerang will be one of the privileged few ports in the world with the capability to port ULCCs. Based on committed investment figures alone, Pengerang will contribute RM18.3 billion to 2020 gross national income and create 8,600 jobs. Pengerang alone accounts for 33% of investment costs of all our entry point projects (EPPs) and nearly 70% of those in the oil, gas and energy sector. In the long run, the ultimate investment over time could be as high as RM170 billion. Therefore, in this respect, let us work hand in hand to realise a vision which will be the game changer in Malaysia’s oil and gas industry.
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