CHINESE oil and gas titans Beijing Beca Sci-Tech Co Ltd and Sinopec Engineering Incorporation (SEI) are confident that a proposed RM20.8 billion integrated petrochemical complex in Lawas, northern Sarawak, will become a reality.

At the signing of a memorandum of understanding for the project’s feasibility study with the state government in Kuching today, Beijing Beca president Hao Liang said his company “is able to turn this pursuit into a reality”.

He said the petrochemical complex, where production is planned to begin in 2022, is a “win-win project for Sarawak, SEI, Beijing Beca and Malaysia”.

It is targeted that the plant, to be located on a 400ha site on Pulau Sari, will produce 10 million tonnes of olefin derivatives annually, 1.2 million tonnes of ethylene and 3.2 million tonnes of deep catalytic cracking (DCC) products. The DCC technology was developed by SEI.

The plant’s feedstock will not be sourced locally or from Petronas, instead, it will be shipped in from the Middle East, primarily Saudi Arabia and Kuwait.

Hao said the proposed investment of US$5 billion (RM20.8 billion) is not only the largest investment project in Sarawak, but the most important one by Beijing Beca.

“Based on our existing investment, the Lawas petrochemical project will take our business and industry to a whole new level.

“Beijing Beca’s chemical development strategy is to provide petrochemical structural units and polyolefin products to industrial customers in China, Southeast Asia and Asia as a whole.”

Sarawak Chief Minister Abang Johari Openg, who witnessed the MoU signing, said Lawas, a tiny district in the state’s far north, hemmed by Sabah to the north and Brunei to the south, was picked due to its “ideal location”.

He said in a preliminary study conducted earlier, the Chinese companies picked Lawas due to the availability of land and water, its cheap power supply, and the fact that the area is not affected by earthquakes and is a peninsula with a natural harbour for large oil tankers.

He added that the firms also chose Lawas as it is close to their main market, China, and major regional markets.

It was reported that the companies initially considered the Sabah coastal town of Sipitang – just across the border from Lawas – as a potential site.

With Lawas chosen, said Abang Johari, the plant will be a game changer for northern Sarawak, particularly Lawas itself and Limbang, adding that “the state government will help them in providing the assisting facilities”.

One such facility is a deepwater port.

“When it (the plant) becomes a reality, it will spread out industrial development to the north (of Sarawak),” said the chief minister.

The project could see job opportunities for some 1,000 people in the first phase, and up to 20,000 in the construction stage. Construction could start in the fourth quarter of this year. – June 10, 2019.