KUCHING, June 10 — Two Chinese companies have agreed to invest US$5 billion (RM20.8 billion) for the proposed development of an integrated oil and gas complex in Lawas in the northern tip of Sarawak.
The state government signed a memorandum of understanding (MoU) with the two firms, Beijing BECA Sci-Tech Co Ltd and Sinopec Engineering Incorporation here today.
It was witnessed by Chief Minister Datuk Abang Johari Openg, Deputy Chief Minister Datuk Awang Tengah Ali Hasan and Beijing BECA Sci-Tech Co Ltd president Hao Liang and Sinopec Engineering Incorporation vice president Zhao Xiangdong.
Work on the first stage of the chemical plant, to be sited on a 400ha at Sari Peninsular, is expected to begin later this year and completed in 2022.
About 22,000 workers of various skills will be needed for the construction of the plant.
Speaking to reporters after the signing, Abang Johari said the two companies chose Lawas to build their plant after they conducted groundwork and feasibility studies on sites in other parts of Sarawak and the region.
“For one, the availability of suitable land, ready supply of water and electricity and environmental stability; Lawas is outside the so-called of Ring of Fire,” he said, adding that the Chinese companies do not want to invest where there was the risk of volcanoes and earthquakes.
The chief minister said the chemical plant will produce, among others, polystyrene and polypropylene, the basic ingredients for the plastic industries.
He said the products will be exported to China as well as the Middle East and Asian countries.
“The setting up of the chemical plant will be a game-changer for us, especially the northern region, because of the huge investment and the job opportunities that it will create,” he said.
Earlier in his speech, the chief minister said it is good to know that investors such as Beijing BECA Sci-Tech Co Ltd and Sinopec Engineering Incorporation have chosen Sarawak as an investment location for their project.
“This clearly reflects Sarawak’s standing as a preferred investment destination among the many possible locations within Malaysia and the region.
“Investors do not simply come with their money to invest; before they come they must have studied the strength and potential of our economy, and other non-economic factors like political and social stability,” he said.
He said with a clear economic policy direction and a big reserve, Sarawak has strong financial standing and he believes these are the factors that have prompted BECA and Sinopec to consider investing in Sarawak.
He said the feed-stock for the chemical plant will come from Middle Eastern countries, including Saudi Arabia, where the two companies have signed an agreement.
*Note: A previous version of this story contained an error which has since been corrected.