by AFIQ AZIZ / pic by BERNAMA
The Sabah Palm Oil Industry Cluster (POIC) development worth almost US$3.1 billion (RM12.9 billion) in Lahad Datu is expected to be funded by private equity from Qatar, said Entrepreneur Development Minister Datuk Seri Mohd Redzuan Mohd Yusof (picture).
According to Redzuan, Doha’s interest was conveyed during his meeting with the gulf country Prime Minister (PM) Sheikh Abdullah Nasser Al Thani, in his two days working visit early this week.
He said the naptha cracker complex development, which would be the largest investment in the state of Sabah, can be realised without utilising public fund.
“They (Qatar) are very interested in infrastructure, as well as petrochemical, and they are specifically looking to invest in the Sabah’s petrochemical plant which could reach up to US$3.1 billion.
“It will be a private initiative and not involved with any government-linked entity money for the time being,” he told The Malaysian Reserve at the Asia Oil and Gas Conference (AOGC) closing ceremony in Kuala Lumpur yesterday.
For a start, Redzuan said Qatar is expected to facilitate up to US$1 billion (RM4.14 billion) of money which will be derived via the state private equity firm.
The initial sponsor equity, he said, is to ensure that the construction could take off smoothly.
“We are looking at it very closely, and the Qatar government had expressed a strong interest to support and facilitate the first sponsor equity move.
“The whole project is valued at about US$3.1 billion. So, this initial fund is needed to get its going. Hopefully the PM (of Qatar) will formalise it once we get all of this agreement done by the two parties,” he said, without revealing the parties involved in the project.
“They are going to ink it soon,” he added.
The plan to set up petrochemical plant at POIC Lahad Datu meant to process naptha, a petroleum by-product, into a variety of petrochemical products for the global market.
Last March, POIC Sabah Sdn Bhd, the owner and operator of the POIC in Lahad Datu, had signed a term sheet agreement with Burel Industries Sdn Bhd for the development of a petrochemical plant in the area.
The investment, if materialises, will be the single largest investment in Sabah to date.
It is envisaged that the plant will produce about 1.5 million tonnes of petrochemical products a year.
“I am not disclosing who the party in Malaysia are but in Qatar, it would definitely be a very high-net-worth organisation that we have already looked at,” Redzuan added.
The investment is also expected to offer a wide range of opportunities to small and medium enterprises (SMEs).
“We are already started to gain the database through our vendor data. Because these SMEs are already listed, without having to go through much of regulatory process, because it is not a government owned project.
“They will look at the merits of these companies, and if God will, they will be given the first right of few cells to undertake the early parts of the project development,” the Alor Gajah MP said.
Besides that, the minister said MED is also working on other capital projects that would be announced by the countries’ respective PMs once the details are finalised.
Redzuan said Doha, through its Ministry of Transport and Communication, has shown strong interest to participate in the recently approved Kuala Linggi International Port (KLIP) development worth billions of ringgit.
Located in Melaka, the port generated around RM50 million in revenue a year and has been identified to be potentially upgraded into an international standard.