China Energy multibillion investment a quantum leap for Kedah

A cynic commented that the connecting highway to Pulau Bunting is to grow padi. Surely that is not a mature and informed comment.

The connecting highway was part of the planned Zon Industeri Petroleum Yan (ZIPY).

Last night, there was a signing ceremony to confirm the participation and invesment of China Energy Huacheng Industrial Investment Co. Ltd. in Merapoh Corporation Sdn Bhd to revive the ZIPY project.

There was a large press presence last night but thus far, only few reports available on Google. There rest could follow later.

 
First from Sundaily, below:

Merapoh, China Energy JV to revive Zipy

Posted on 21 April 2014 - 05:38am
Eva Yeong
sunbiz@thesundaily.com

PETALING JAYA: The Yan Petroleum Industrial Zone (Zipy) looks set to be revived with the signing of a partnership agreement between Merapoh Resources Corp Sdn Bhd (Merapoh) and China Energy H City Realty Investment Co. Ltd (China Energy) this Thursday.

The agreement will see state-owned China Energy emerging as a majority shareholder with a 70% equity interest in Merapoh and an investment of almost RM70 billion by China Energy, which will enable Merapoh to proceed with its projects and plans.

According to a media advisory issued by Merapoh last Friday, the most immediate project that Merapoh intends to proceed with is the creation of Malaysia's biggest oil refinery complex to be built in Kedah.

"Upon full operation of the refinery, Merapoh shall be supplying an estimated 8% of China's total need for refined oil and refined petroleum products," said Merapoh chairman Datuk Bistamam Ramli.

Merapoh had in the past signed a memorandum of agreement with the Kedah state government in 2009 for the development of a US$10 billion (RM32.38 billion) refinery project in Yan, Kedah. The project was to comprise a two-train refinery with a total capacity of 350,000 barrels per day.

According to past reports, Merapoh executive chairman Md Nazri Ramli said the project would involve the reclamation of offshore land totaling 340ha, and the use of 40ha on-shore land.

It was also reported that Merapoh would import crude petroleum oil from the Middle East and process the crude into refined products which would then be exported to China and other Asian nations.

A tie-up with China's state oil company China National Petroleum Company was established to market Merapoh's refinery products for 20 years.

Korea's SK group of companies through its subsidiary SK Engineering & Construction was appointed to do the engineering, procurement, construction and commissioning of the project.

Zipy was first announced in 2007 by the then Barisan Nasional state government. It was renamed Sungai Limau Hydrocarbon Hub (Sulihh) by PAS which took over the state administration after the 12th General Election in 2008.

In August last year, Kedah Mentri Besar Datuk Mukhriz Mahathir said the state government was keen to revive Zipy but several matters had to be resolved first including land acquisition, investment partner of Merapoh, project developer and source of crude oil.

Mukhriz had said that a company from China had shown interest to invest in the area.

A check with the Companies Commission of Malaysia (SSM) shows that Merapoh was registered in September 2005 and is currently in winding up status.

Petrobanq Sdn Bhd and Nazri are listed as shareholders of Merapoh, with Petrobanq being the major shareholder and Nazri holding only one share. Nazri is also listed as a director of the company.

Meanwhile, a check on Petrobanq showed that it is a dormant company with Nazri listed as its director and major shareholder. The other two shareholders are Mohd Saiful Aswad Abu Bakar and Mohd Hassan Mansor.

Within eight months after Mukhriz's announcement to revive the project, it has come to fruitation.  

The Bernama report in Malay below:

EKONOMI › BERITA

Zipy: China Energy Meterai Perjanjian Perkongsian Dengan Merapoh

ALOR SETAR, 24 April (Bernama) -- China Energy Huacheng Industrial Investment Co. Ltd (China Energy) hari ini memeterai perjanjian perkongsian dengan Merapoh Resources Corporation Sdn Bhd (Merapoh) bagi membuka laluan pembangunan kilang penapis minyak mentah terbesar di Malaysia.

Dengan permeterian perjanjian perkongsian itu, Zon Perindustrian Petroleum Yan (ZIPY) yang dirancang oleh kerajaan negeri Kedah sejak 2007 bakal dihidupkan kembali.

Pengerusi Merapoh Datuk Bistamam Ramli berkata perjanjian itu akan menyaksikan China Energy syarikat milik kerajaan China muncul sebagai pemegang saham majoriti dengan 70 peratus kepentingan ekuiti dalam Merapoh, manakala baki 30 peratus akan dipegang oleh rakan kongsi tempatan.

"China Energy yang menyediakan pelaburan awal US$10 bilion akan membolehkan Merapoh yang disusun semula meneruskan rancangan dan projek-projeknya, yang mana yang paling segera adalah pembangunan dan pelaksanaan kompleks penapisan minyak di Kedah.

"Komplek perindustrian petroleum bersepadu itu akan dibina di kawasan tanah seluas 1,000 hektar dan ini termasuk kedua-dua kemudahan luar pantai dan daratan," katanya selepas majlis permeterian tersebut di sini, malam Khamis.

Menteri Besar Kedah Datuk Seri Mukhriz Tun Dr Mahathir menyaksikan majlis permeterian tersebut. China Energy diwakili oleh Pengerusinya Zhou Qing Jun, manakala Merapoh oleh Pengarahnya Md Nazri Ramli.

Bistamam berkata Merapoh menyasar pengeluaran 400,000 tong minyak sehari selepas operasi penuh kemudahan tersebut, walaupun ia direka bentuk untuk menghasilkan 800,000 sehari.

Projek Zipy diumumkan pada 2007 oleh kerajaan negeri Barisan Nasional yang menyasarkan kutipan cukai tahunan berjumlah RM400 juta daripada projek tersebut yang dirancang beroperasi tahun lepas.

Projek yang dibiayai swasta itu merancang mendapatkan minyak mentah dari Timur Tengah bagi kilang penapis di sini sebelum dieksport ke negara-negara Asia.

--BERNAMA

The Bernama report shows a more staggering numbers.

The initial investment of US$10 billion is a respectably sizeable investment and much more investment is expected to come.

Nanyang Press here quoted the investment figure could reach US$20 billion (about RM66 billion). This is far more substantial that the RM36 billion estimated when the project was shelved in 2009. 

Merapoh will be developing a production capacity of 800,000 barrels per day and set a 400,000 barrels per day production target.

At the initial production level of 200,000 barrels per day, that is by itself about half of Petronas current refinery capacity.

Such size of target was possible because China Energy is supported by some eight other Chinese companies with capability and capacity at the upstream and downstream level and as end buyer.

China is currently building it's petroleum reserve and stand as a ready buyer.

In addition to tax to the government, Dato Bistamam said in his speech that the massive project will have many off-shoot benefits to the local economy in terms of employment, housing, construction, education, supplies, services, commerce, etc.

China Energy Chairman, Zhou Qing Jun confidently said in his speech that China Energy could help the Northern Corridor achieve it's development target at a much faster pace.

This investment will be a quantum leap for the Kedah economy.

The Kedah economy will never be the same from now on. Hopefully the local Kedahans would learn to appreciate the effort of the current state government and take advantage of the opportunity that is presenting itself.