Malaysia's Terengganu state government, through its Eastern Pacific Industrial Corporation (EPIC) unit, is planning a MYR2 billion (€475 million; $533.5 million) expansion for the Kemaman Supply Base (KSB) following the commitments by five oil companies to use the facility, according to local press reports.
The move from the state authorities is in line with the Malaysian government’s push to drive investments to the energy sector more vigorously.
Former Prime Minister Tun Abdullah Ahmad Badawi gave a speech earlier this week in which he stressed the importance of securing more energy deals as constituting the “essential means in tackling poverty, improving human welfare and increased living standards.”
“We need to pursue common, comprehensive, cooperative and sustainable energy security, as well as a regional vision with open, harmonious, and inclusive methods,” he said.
With regards to the extraction base, Terengganu Chief Minister Seri Ahmad Razif Abdul Rahman said the state had been planning an expansion for a long time as it needed to prepare for growth.
“We want to make sure that Terengganu is serious and exposed to as many opportunities as possible in the oil and gas sector,” he was reported to have said in the local press.
Pengkalan Bekalan Kemaman, which is a subsidiary of EPIC and the operator of KSB, has entered into a lease service agreement with five petroleum production companies in a MYR500 million deal.
The five companies are Carigali Hess Operating Company, Vestigo Petroleum, Coastal Energy KBM, EQ Petroleum Production Malaysia and Sapura Kencana Energy Peninsula Malaysia.
In January, seven production sharing contractors signed a similar deal, worth MYR1 billion, to use Kemaman supply base. They were Petronas Carigali, Exxon Mobil Exploration & Production Incorporated, Talisman Malaysia, Lundin Malaysia, Petrofac Energy Development, Petrofac and Hess Exploration & Production Malaysia.
Pengkalan Bekalan Kemaman managing partner and chief executive officer Noor Fadzil Mohamed Nor told the Malaysian press that discussions were going on with several local and international investors to expand the base and that China’s Huaxi group had shown interest to cooperate on this deal.
Neighbouring Kelantan state also recently announced plans to develop an offshore supply base in Pasir Puteh, further up the coast from Kemaman. The Tok Bali Supply Base (TBSB), which was set to begin construction in April, has potential for attracting up to MYR1 billion worth of investments in the next three years, with over 100 companies expressing interest, according to International Trade and Industry Minister Seri Mustapa Mohamed.
The first phase of the TBSB project has been completed with an all-weather wharf covering a length of 500 metres and 7 metres draft. This facility can provide adequate berthing space for five supply boats. It allows for 24-hour operations, material handling equipment, transport vehicles, warehouse space, open yard, office space, infrastructure facilities and storage facilities in a customs-bonded area. The facility will complement KSB by helping to ease congestion and provide a closer alternative to oil fields further north.