KUCHING: Sarawak will have its own multi-million ringgit integrated supply base in Bintulu next year to serve the needs of oil and gas (O&G) industry.
Phase one of the supply base project, which is undertaken by Bintulu Supply Base Sdn Bhd (BSB), is expected to cost RM300mil. It will provide a 370m long wharf able to accommodate four offshore supply vessels at any one time.
The supply base is scheduled to be operational in the fourth quarter of 2019.
Bintulu Supply Base signed an agreement to lease land at the Second Inner Harbour, Bintulu Port for the project from Bintulu Port Holdings Bhd (BPHB) yesterday.
The signatories were Bintulu Supply Base chairman Ahmadi Yusoff and BPHB chairman Hadzari Abang. Chief Minister Datuk Patinggi Abang Johari Tun Openg witnessed the ceremony.
Bintulu Supply Base is a smart partnership between Yayasan Sarawak and state-owned private companies OBYU Holdings Sdn Bhd and Kris Sakti Petroleum Sdn Bhd. It is a strategic asset and infrastructure for the growth of the Sarawak O&G industry.
“The integrated supply base will provide a one-stop solution for the O&G industry, from exploration to development to production needs, including provision of facilities and services to support drilling operations.
“The integrated asset and facilities hold the key to ensure a cost effective and efficient solution to the O&G players,” according to Bintulu Supply Base.
The company said the development of the supply base would be carried out in phases, taking into consideration the specific requirement of the O&G industry.
“The phased development approach is based on market demand and the fit for purpose of the O&G players.
“The supply base will operate in compliance with the industry health, safety, security and environment standard,” it added.
Bintulu Supply Base said as the project is strategically located in relation to the offshore fields in the Sarawak Basin in close proximity to fields offshore Sarawak, this would enable cost efficiencies to be attained by the O&G players from cost savings due to the shorter travel time from offshore to onshore.
Ahmadi said the set-up of the supply base was in line with Petroliam Nasional Bhd’s (Petronas) initiatives to achieve cost efficiency and operational effectiveness especially for players in Sarawak.
Johari described the integrated supply base project as a significant development of Sarawak’s O&G inclusion strategy.
“It will provide a strong platform for a most effective and efficient logistical service to the upstream activities undertaken by O&G companies on the continental shell, off the coast of Sarawak where valuable petroleum and natural gas resources are located,” he said.
The chief minister said the Sarawak government had decided to issue mining leases to the newly set-up Petroleum Sarawak Bhd (Petros), thereby vesting the mining rights unto Petros.
He said Petros would work out fair and equitable arrangement with Petronas and other companies relating to the mining of O&G from the areas covered by the mining leases.
“In regulating the upstream O&G production, Petronas must only deal with Petros to produce and extract oil and gas from beneath land within the state’s boundaries.
“Petros, under direction from the state government, will then enter into mining and production sharing agreements with Petronas and other major industry players,” he added.
Johari said the state government would also regulate gas distribution in Sarawak by July 1, this year with the enforcement of the Gas Distribution Ordinance, 2016.
“In regulating the distribution of gas ,the state expects to secure more gas necessary to expand its electricity generation capacity and accelerate industrial growth in Sarawak.
“The government wants to put an end to the present scenario whereby Sarawak has abundant gas for export to countries like Japan and South Korea but not enough gas for its own domestic use or to propel its industrialisation agenda.”
The chief minister said that under the Gas Distribution (Licence) Regulations 2018, the distribution of gas to any customers (intermediate and end-users) from any gas processing plant in Sarawak (both onshore and offshore) by way of pipeline would require a licence.
He said Petros would be granted a licence by the state to distribute gas from Petronas processing separation plant at Tanjung Kidurong, Bintulu.
By July 1, Sarawak would assume full regulatory authority over the upstream and downstream aspects of the O&G industry, he said.
The O&G unit of the Chief Minister’s Office will organise an engagement with Petronas and other industry players by the middle of next month to ensure an orderly implementation of the new policies related to the O&G industry.