The landscape of Pengerang is going to change forever.
The southern tip of Peninsula Malaysia now is like a picture postcard of rural Malaysia. The undulating road bookend by plantation land on either side of the road is dotted with the occasional cyclist on a weekend excursion.
Kampung Sungai Rengit, a small town, is filled with seafood restaurants, symbolising the fishing community that have relied on the waters surrounding the area for their livelihood for generations.
Ngau: ‘I was asked about my vision and I said it is going to be bigger than Singapore.’
But that picture will eventually make way for the gleaming metal petrochemical structures that will soon be built once a regional oil storage and trading hub is built by
Dialog Group Bhd in a couple of years.
That would be followed by the 2,000ha Refinery and Petrochemical Integrated Development (RAPID) project by
Petroliam Nasional Bhd (Petronas) and other petrochemical companies which are now engaged in discussions to determine just what they will put up in an area that is being designed to be a massive petroleum and petrochemical hub for the Asia-Pacific region.
From a geographical perspective, it is just a stone's throw away from Jurong in Singapore which is the third largest refining centre in the world.
“To build another Singapore is subconsciously in my dream. If Singapore can do it, why can't Malaysians do it?” asks Dialog executive
chairman Ngau Boon Keat.
Realising a dream
Ngau, a veteran in the oil and gas industry, spoke with StarBizWeek about the rationale for building what can only be described as the country's most ambitious oil and gas project.
The scale of the project is in his word “mind-boggling”. It is three times bigger than the My Rapid Transit project in the Klang Valley, which is valued at RM40bil to RM45bil.
Ngau recalls working in Jurong, Singapore after graduating as an aeronautical engineer. His job, secured after a walk-in interview, was to help build Singapore's first refinery.
“In 1971 there were hardly any jobs in Malaysia and Singapore was turning into an oil and petrochemical centre for the Far East.
“They started in late 1960s and today, Singapore is the third biggest petrochemical refining centre in the world. It's very successful.”
The creation of Singapore's oil and gas refinery business was a magnet for Malaysians such as Ngau. Finding it difficult to get a job back then, he and his contemporaries made a beeline to Singapore and were duly welcomed by industries in the republic needing skilled labour.
The investments poured into the oil and gas industry in Singapore created high-paying jobs on the island which then spilled over into the other aspects of the economy.
That simple formula is now being replicated in Pengerang and the availability of skilled-labour from Malaysia's oil and gas industry is plentiful but without the pull factor, they will keep being siphoned off by other countries with the promise of much higher salaries.
“If you go to Dubai, Qatar or Saudi Arabia, there are a lot of Malaysians working there because they have high-value jobs. If you don't create jobs and just sell the oil without value-add, it will be a wasted opportunity.
“When oil is refined in Singapore, it creates a lot of wealth and today, about half of Singapore's trade is oil and Singapore does not produce one drop of oil.”
An artist’s impression of Dialog’s oil storage terminal in Pengerang.
Ngau was back in Malaysia in 1975 just after Petroliam Nasional Bhd (Petronas) was formed. He worked on laying the foundation of Petronas and in his journey, paid a visit to Shell.
“We looked at Shell, which was the world's biggest oil company. It was a Dutch company, from a country that had little gas but no oil and yet it is the biggest oil company.
“It could do it because it has the know how and the skills. It can go and look for oil elsewhere in the world.
“We have oil and we want the skill. While producing oil we must grow local Malaysian companies to get the skill and along the way value add,” he says.
The other thing Ngau has observed was the recent paucity of investments into the oil and gas industry in Malaysia. Oil and gas is being explored and produced in countries such as Sudan and Vietnam but for much of this millennium, investments into the industry was lacking.
Ngau says that all changed after
Prime Minister Datuk Seri Najib Tun Razak took office. Najib, having worked for Petronas as a young man, understands the importance of the oil and gas industry, Ngau says, and if there are no major investments being made in Malaysia, then “all the knowledge we have at Petronas for the past 30 years will go elsewhere.”
“When plants are built in other countries, you create jobs there.”
Why Pengerang
Ngau says that when he first started work in the 1970s, the ships that lugged crude oil in its belly were between 150,000 tonnes and 200,000 tonnes in size. Today, the big crude ships are either 300,000 tonnes or 400,000 tonnes.
Singapore, which is the third largest refining centre in the world, has a port depth of 18m. It's deeper than any other port in Malaysia but the large ships have to park about 8km to 10km offshore to pump their crude into the storage terminals in Jurong.
Ngau says Dialog found that just 2km offshore Kg Sungai Rengit in Pengerang exists a channel with a depth of 24m, sufficient to handle the largest of crude carriers the world has today.
The shorter distance will also lower the cost of transporting crude from offshore.
Furthermore, Pengerang is just off the main shipping line where crude ships ply their routes on a daily basis.
“We were excited and the first thing we did was talk to
Johor Corp,” recalls Ngau.
Sand being pumped into an area in Pengerang that is being reclaimed by Dialog.
For the first year, nothing happened. Later, the file was seen by the Johor government and Ngau says things started moving.
“In terms of investment, we said we will start with RM1bil to RM2bil and later increase it to RM5bil,” Ngau says of Dialog's plans for the oil storage terminals in Pengerang.
“I was asked about my vision and I said it is going to be bigger than Singapore,” he says.
To convince the state officials that his plans were not some pipedream, Ngau took several state government officials to Rotterdam, which is the biggest refinery and petrochemical port in the world.
“When I visited Rotterdam in 1978, it was the pride of the Dutch. It's growing and the city benefited. And after so many years, Rotterdam is still reclaiming land from the North Sea,” says Ngau.
That short trip made an impression with the officials who were convinced that Dialog's plans could work.
Illustrating the longer-term potential of such a business, Ngau observed that at the end of 2009, Rotterdam was reclaiming 1500ha of land.
“When I was there in 1978, they were reclaiming land and in 2009, they are doing even more,” he says, highlighting how the growing demand of the industry has meant constant expansion of the business.
“The Dutch did not have land or oil and yet they got the world to make Rotterdam the oil centre. It's because they are very efficient and want to succeed,” he says.
To Ngau, Pengerang has that and more. A port there is naturally sheltered and is deeper than what Singapore can offer. All the ingredients, he feels, make for a compelling case for an oil and gas hub.
Ngau took the Federal government officials on three more trips to Rotterdam to convince the Government of the potential of Pengerang.
“We may not be bigger than Rotterdam because it keeps growing but if Pengerang and Singapore are to combine, we will be bigger than Rotterdam in 10 years.
“Over 20 years, Pengerang will surpass even Rotterdam if we have the will to do it.”
Oil and gas hub
The vision of Pengerang becoming a major oil and gas centre got off the ground last month when Petronas' RAPID project was launched.
Studies are ongoing before a final investment decision is made but the initial numbers look massive. The scale of the project is larger than the combined size of its Malacca, Kertih and Gebeng plants.
Some RM120bil worth of investments have been earmarked by Petronas including RM60bil by the national oil company and up to RM38bil by
Kuokuang Petrochemical Technology Co, a Taiwanese company.
Further investments will be made as Ngau says interested multinational parties are knocking on the doors wanting to know more about Pengerang.
“Once you have the proper masterplan, then you can grow. We recommended the state start with the masterplan two years ago and without it, RAPID or the Taiwanese will not come,” Ngau says.
The attraction of Pengerang as an oil and gas hub is that the design will be new. Singapore's blueprint was laid down 40 years ago and the technology and know-how have evolved since and that would allow the planners to incorporate the latest methods and know how from Singapore and Rotterdam into the overall design of the oil and gas hub.
The masterplan for Pengerang is now into its second phase.
“RAPID is integrated and you need the best efficiency to produce at a lowest cost. We don't want to go for quantity but for quality and efficiency.
“Investors want to come to Pengerang not because it is cheap land or the incentives but because it is the most efficient location for producing the product and doing business.”
Efficiency savings can mean billions of dollars in profits given the size of the investments being planned for Pengerang.
Ngau feels there is no concern about over-capacity of petrochemical business ahead of the construction of Pengerang with other oil and gas producing countries having a similar vision for their own industry.
He feels the oil majors, which possess the technology and skills, will have a look at Pengerang given the political situation in other oil producing countries such as Libya and Egypt.
“The other petrochemical complexes are built in the consuming countries such as India and China. In China 10 petrochemical complexes of smaller sizes than in Pengerang are being built.
“In the United States, five to 10 (refineries) are being built. When everybody is finished with the projects, there can be over oversupply but in three years time, it will come back up again. The trend is going up,” he says.
Demand for petroleum products will be strong given the momentum in economic growth in South-East Asia. Furthermore, refining capacity has been virtually at a standstill since the start of this millennium.
“Did you know that in South-East Asia only one small refinery was built in Vietnam since the Malacca refinery was completed in 1997,” says Ngau.
“From now, when Pengerang is completed in 2016-2017, it is actually 20 years since a refinery is built in South-East Asia.”
Singapore, he says, is not building a refinery because of the land requirements and it is going instead into downstream and producing petrochemical products.
Competition from Singapore
Singapore is still the heavyweight oil refiner in this region and even though Pengerang has the ambition of assuming pole position someday in the oil refining business, he feels both places can complement each other.
“The only way Singapore's petrochemical business can grow is if it buys sand from as far as Cambodia and Vietnam. It's going to be very costly.
“For Singapore, whatever land it has will be for downstream, getting into more value-adding instead of refining,” he says.
Ngau says in the business, refining is the first stage and the next is petrochemicals which is subdivided into three other stages - primary, secondary and tertiary.
Singapore, he says, has gone down to tertiary side of the business to make finished products.
“They will be happy to see that we are growing the primary refinery into secondary petrochemicals. But for us to go into tertiary, it will take at least 10 to 15 years to catch up with Singapore,” he says, adding that by the time Pengerang gets into the tertiary petrochemical business, Singapore would have pulled even further ahead.
“Some of the things which Singapore is making we will not do but the raw materials for some of our finished products may need some raw materials from Singapore.
“And Singapore may buy some of the latest materials we produce in Pengerang to make its finished products. That's why I say this is complementary.”
发表于 2-3-2014 01:07 PM
变色卡
千斤顶
本周最热论坛帖子
2100 
58
