Sinopec buying big stake in venture for developing oil field
Business Times 27 Jul 11;
(KUALA LUMPUR) KNM Group Bhd and Zecon Bhd have entered into an agreement with Gulf Asian Petroleum Sdn Bhd (GAP) to build a refinery and an oil storage terminal worth a combined RM17 billion (S$6.9 billion) in Teluk Ramunia, Johor, Malaysia's Business Times reported.
GAP, which on April 30, 2010, obtained an approval from the Malaysian Industrial Development Authority for the manufacturing licence for the integrated petrochemical plant, is 50 per cent owned by Mubadala Capital Sdn Bhd (MCSB).
The remaining shares in the firm are owned by Abdul Aziz Hamad Al-Dulaimi, the president of Gulf Petroleum Ltd, whose shareholders include Qatar General Insurance and Reinsurance Company, Al-Mana Group, National Petroleum Group and the banking arm of Al-Sari Group.
MCSB's controlling shareholder, Zainal Abidin Ahmad, is also the chief executive and controlling stakeholder of Zecon.
The deal, bound to cause waves of interest in the oil and gas sector here, came on a day when two other oil and gas projects were announced. Petroleum Bhd and Kencana Petroleum Bhd announced an RM11.5 billion merger plan that will become the country's largest oil and gas service provider.
In a statement to the stock exchange, KNM said it was forming a consortium with Zecon and either a Korean or Chinese contractor to undertake both the projects. The projects comprise a RM15 billion oil refinery and a RM2 billion oil storage terminal.
The refinery will have a capacity of up to 200,000 barrels a day and 525,000 tonnes-a-year polypropylene processing plant, while the oil storage terminal will have a capacity of 2.328 million cubic metres.
The refinery and the storage facility are expected to be completed within 40 months and 18 months respectively, KNM said, adding the refinery project will be funded by 30 per cent equity, with the balance funded through project financing or sukuk issuance.
To help cover some of the storage facility's cost, KNM will also try to arrange a sukuk issuance of up to RM1.5 billion to cover project financing during construction, KNM said.
Apart from the KNM-Zecon announcement, Daya Materials Bhd said it had secured two supply and delivery agreements worth RM27.42 million from Petronas Methanol (Labuan) Sdn Bhd.
Meanwhile, Malaysia's Business Times also reported that China's largest petroleum refiner, Sinopec Petroleum Services Corp (Sinopec), is poised to take a major stake in a planned RM2.06 billion venture to help develop a Petronas marginal oil field located off the coast of Terengganu.
Under the deal, Sinopec will hold 40 per cent stake in the consortium, while Sabio Oil & Gas Sdn Bhd (SOG), a unit of Sabio Technology Bhd (STB), and Iranian group International Oil and Design and Construction Sdn Bhd (IODC)) will have 30 per cent stake respectively.
'This is our maiden foray in the oil and gas industry. We have set up SOG solely for this project and we are optimistic to be given a chance by Petronas to develop this project,' said STB executive chairman Ahmad Sukimi Ibrahim.
Since local participation in the consortium must be a listed entity, STB, which is involved in electronic contract manufacturing services, plans to float its shares in the local bourse soon.
Incorporated in November last year, STB has obtained the approval to list on Bursa Malaysia and will soon be issuing its public prospectus.
Petronas has been given the mandate to develop 27 marginal oil fields out of the current 106 marginal fields in Malaysia, which are estimated to contain 580 million barrels of oil.
