335 SOGIP Masterplan

Disclaimer
This document is jointly prepared by Sipitang Oil and Gas Development Corporation Sdn Bhd (SOGDC), Sabah
Institute for Development Studies (IDS), Malaysia Petroleum Resources Corporation (MPRC), PETRONAS Chemicals
Group Bhd (PCG), PETRONAS Gas Bhd (PGB), PETRONAS Malaysia Gas Management (MGM) and Petroleum
Management Unit (PMU), Performance Management and Delivery Unit (PEMANDU), PETRONAS Sabah Labuan
Regional Office (SLRO) and SOGIP Industry Advisor (all above defined as the Parties) that includes general
background information about the parties current and planned activities as at the date of this document.
This information is given in summary form and does not purport to be complete. Information in this document,
including forecast financial information should not be considered as advice or recommendation to investors or
potential investors in relation to holding, purchasing or selling securities or other financial products or instruments
and does not take into account any particular investment objectives, financial situation or needs. Before acting on
any information, readers should consider the appropriateness of the information having regard to these matters,
any relevant offer document and in particular, readers should seek independent financial advice. All securities
and financial product or instrument transactions involve risks, which include, among others the risk of adverse or
unanticipated market, financial or political developments and, in international transactions, currency risk.
This document may contain forward looking statements including statements regarding the intent, belief or current
expectations with respect to the Parties businesses and operations, market conditions, results of operation and
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to place undue reliance on these forward looking statements.
Each forward-looking statement speaks only as of the date of this document. The Parties do not undertake any
obligation to publicly release the result of any revisions to these forward looking statements to reflect events or
circumstances after the date hereof to reflect the occurrence of unanticipated events. While due care has been
used in the preparation of forecast information, actual results may vary in a materially positive or negative manner.
Forecasts and hypothetical examples are subject to uncertainty and contingencies outside the Parties control. Past
performance is not a reliable indication of future performance.
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Table of Contents
CHAPTER 1
1.0
CHAPTER 2
2.0 BACKGROUND

2.1 SABAH NATURAL GAS SUPPLY SCENARIO

Total Discovered Gas Resources in Sabah

Sabah Gas Supply Network Infrastructure and

Demand Centres

Gas Supply to Kimanis and Sipitang
3
5
5
CHAPTER 3
3.0 INTRODUCTION TO SOGIP

3.1 SOGIP VISION AND MISSION

Vision

Mission
7
8
8
8
CHAPTER 4
4.0 SOGIP MASTER PLAN

4.1 Objective

4.2 Terms of Reference

4.3 Benchmarking
9
10
10
10
CHAPTER 5
5.0 INVESTMENT SCENARIO & INDUSTRIAL

PLANNING ACTIVITIES

5.1 Investment Scenario

5.2 Phase 1 SOGIP Development

13
14
14
16
CHAPTER 6
6.0 LAYOUT PLANNING
21
CHAPTER 7
7.0

23
24
24
CHAPTER 8
8.0 INFRASTRUCTURE PLANNING

8.1 Roads

8.2 Port and Jetty Facilities

8.3 Land and Site Preparation

8.4 Land Allocation Process
27
28
28
28
28
CHAPTER 9
9.0 UTILITIES PLANNING

9.1 Centralised Utility Facilities (CUF)

9.2 Water Supply

9.3 Telecommunications
29
30
32
32
CHAPTER 10
10.0 INCENTIVES & PROMOTIONS

10.1 Incentives

10.2 Promotions
33
34
35
CHAPTER 11
11.0 IMPACTS & BENEFITS TO SABAH STATE
37
CHAPTER 12
12.0 SOGIP DEVELOPMENT PLAN

12.1 Proposed Governance Structure

12.2 Statutory Requirements
39
40
41
CHAPTER 13
13.0 SOGIP KEY SUCCESS FACTOR

APPENDICES

Governance Structure
ACKNOWLEDGEMENTS
ABBREVIATIONS
43
45
45
47
49
EXECUTIVE SUMMARY
SUPPORT SERVICES PLANNING

7.1 Support Services Planning in Sipitang
7.2 Support Services Planning in SOGIP
5
6
iv | SIPITANG OIL & GAS INDUSTRIAL PARK (SOGIP) MASTERPLAN
List of Figures
CHAPTER 2
2.0 BACKGROUND
Figure 1 : Summary of Total Discovered Gas Resources in Sabah
Figure 2 : Location of Demand Centres in Sabah / WP Labuan
Figure 3 : New industries in Kimanis and Sipitang
Figure 4 : Supply outlook for Kimanis and Sipitang Customers
5
5
6
6
6
CHAPTER 5
5.0 INVESTMENT SCENARIO & INDUSTRIAL ACTIVITIES PLANNING

Figure 5 : Location of Sipitang and SOGIP
Figure 6 : Potential ammonia and Urea derivatives to be developed
Figure 7 : Growth in Asia Crude Consumption & Comparison
of crude supply distribution
Figure 8 : SOGIP Development Plan
14
14
16
CHAPTER 6
6.0 LAYOUT PLANNING

Figure 9 : Layout Planning of SOGIP
22
22
CHAPTER 9

Figure 10 : Comparison between common concept and
centralised utility concept
30
CHAPTER 10

Figure 11 : Promotional Programmes in SOGIP
35
35
CHAPTER 12
12.0 SOGIP DEVELOPMENT PLAN

Figure 12 : Proposed Governance Structure
Figure 13 : SOGIP Organisational Chart
40
40
41
18
20
30
SIPITANG OIL & GAS INDUSTRIAL PARK (SOGIP) MASTERPLAN |
CHAPTER 1
EXECUTIVE
SUMMARY
| SIPITANG OIL & GAS INDUSTRIAL PARK (SOGIP) MASTERPLAN
1.0 EXECUTIVE SUMMARY

This SOGIP master plan provides the foundation which identifies and explores the potential industries in developing
SOGIP as a premier industrial park focusing in the development of petrochemicals. This master plan is aligned with
Sabah Development Corridor (SDC) and Malaysias Economic Transformation Programme (ETP). It serves as a
guidance to outline and implement the planned development taking into account SOGIPs strategic positioning and
potential investments based on gas and non-gas usage. Utilities, infrastructures, incentives, promotions, statutory
standards and centralised approving authorities are also outlined askey success factors.
The SOGIP master plan shall be guided according to the gas availability, gascomposition, alignment of SDC and ETP
and maximisation of gas usage in Sabah state by adding value to the supply chain.
The ultimate vision is to make SOGIP as the premier oil and gas industrial park of choice for petrochemical hub in
Asia Pacific. SOGIP adopts and emulates the best practices from other successful industrial parks around the world
namely Jurong Island Development in Singapore, Jubail Industrial City in Saudi Arabia and Jamnagar Refinery
Complex in India.
With the benchmarking against other prominent industrial parks, SOGIP will emerge as one of the new up and
coming industrial parks focusing on the development of petrochemicals.
SIPITANG OIL & GAS INDUSTRIAL PARK (SOGIP) MASTERPLAN | 3
CHAPTER 2
BACKGROUND
MOUNT KINABALU
Tallest Mountain in Malaysia, with
the highest peak at 4095.2M above
sea level.
Photo Source :http://www.horizonborneo.com
2.0 BACKGROUND
The oil and gas sector is the mainstay of Malaysias
growth since oil was first drilled in 1910 in Sarawak1.
Furthermore, the founding of PETRONAS in 1974 is the
force for the development of the oil and gas resources
and plays a major role in driving the industrys growth
in Malaysia. Malaysia is one of the worlds largest natural
gas and crude oil reserves in which Sabah has about
13.22 trillion cubic feet (tcf) of gas.
Latest discovery of oil offshore of Sabah, initial
estimates put the wells reserves at 227 million barrels
of oil equivalent2. Sabah has the potential for deep
water exploration, oil and gas services and integrated
petrochemical3. One of the major projects in Sabah is
located at Mengalong, Sipitang which is 145 km from
Kota Kinabalu. Sipitang is a town, district and also
a parliamentary constituency located in the Interior
Division of Sabah with a population of 34,8624. The town
is set to become one of Sabahs oil and gas industrial
centres following the state governments decision to
build a world class integrated industrial park designated
for oil and gas related and other heavy industries
through industrial clustering.
Sipitang Oil and Gas Development Corporation
(SOGDC)was formed to spearhead the development of
the Sipitang Oil and Gas Industrial Park (SOGIP). SOGDC
will act as a special purpose vehicle (SPV) company
to own, develop, manage and market the 4,065 acres
of land in SOGIP. Under the ambit of the Sabah state
government, SOGIP site is expected to attract new
investments worth an estimated RM35.1 billion with the
potential of creating 3,745 new job opportunities5 upon
its completion. SOGIP, which was approved in 2010,
has already begun attracting local and foreign oil and
gas investors to scout numerous possible investment
opportunities on the site.
The availability of natural gas as feedstock from
Sabahs offshore production facilities is one of the
many attractive proposals that enable SOGIP to be well
positioned to spearhead the development of the oil
and gas industry in Sabah state. Industries that would
benefit from natural gas feedstock include:
Economic Transformation Programme Report

Economic Transformation Programme Report
3
MyCorridor website: www.mycorridor.malaysia.gov.my
4
www.statistics.gov.my, based on year 2010
5
Sabah Oil & Gas Development Lab Report
6
MPRC website: www.mprc.gov.my
1
Petrochemicals plants to manufacture resins,

plastics, pharmaceutical products, fertilisers and
packaging materials
Heavy industries
Logistics centre for exports
Research & Development (R&D) for bio-fuels and
alternative energies
Fabrication, construction and related activities
Bulk product storage
Basic infrastructure facilities, utilities and general

amenities such as water supply, electricity supply, and
roads will be constructed on the site. Following this,
jetties for importing raw materials and exporting various
types of finished products will be built to give SOGIP
the access to global markets.
Besides that, new residential, retail and commercial
developments will be built concurrently within the
neighbouring area to make SOGIP site liveable and
appealing to the employees working on the site.
As a sign of confidence on the sites economic viability,
PETRONAS Chemicals Group Bhd. (PCG) is building an
ammonia and urea manufacturing complex in SOGIP
at an estimated investment cost of USD1.5 billion. The
Sabah Ammonia-Urea (SAMUR) project is one of the
leading initiatives to monetise natural gas obtained
from Sabahs offshore wells.
The SAMUR Project is among the most recent and
strategic developments located within SOGIP that
supports the oil and gas industry in Sabah. The complex
would comprise of an ammonia plant, a urea plant, a
granulation plant, as well as an integrated utility unit
and jetty facilities. The ammonia plant is expected to
produce 2,100 metric tonnes per day (MTPD) of liquid
ammonia while the urea plant will produce 3,500 MTPD
of granulated urea. Construction has started in the
second quarter of 2012 with completion targeted in
20156.
Further development of petrochemicals sector is guided
by the estimated gas availability and gas composition
which is rich in methane.
2.1 Sabah Natural Gas Supply Scenario

Total Discovered Gas Resources in Sabah
As of 1st January 2013, the total discovered gas
resources in Sabah stood at 13.22 Trillion standard
cubic feet (Tscf) as detailed in Figure 1. From the total
discovered resources, 21% is in producing stage, 42%
is in development stage and the remaining 37% of the
resources are being actively studied internally for future
monetisation or development plan to meet the gas
supply commitment.
Continuous effort to monetise these discoveries are
important to ensure the sustainability of gas supply
to downstream gas customers. Looking forward,
Resources (Tscf)
monetising these fields would be technically challenging.

In addition, the monetisation of these resources is highly
dependent on the downstream gas price to ensure
economic viability of the project.
Notwithstanding the challenges mentioned above,
PETRONAS is continuously pursuing the explorations
efforts in Sabah waters with upstream players such as
Lundin Petroleum, Talisman, Murphy Oil, Shell, etc.
With attractive Production Sharing Contract (PSC)
terms, PETRONAS is expecting an increase in investment
and participation of new players in the upstream sector.
Total Gas Discovered Resources in Sabah
15
10
Producing NAG
Producing AG
Development
Pre-Dev
(Committed)
Pre-Dev (Noncommitted)
Total
Discovered
Resources
Figure 1: Summary of Total Discovered Gas Resources in Sabah

Figure 1 : Summary of Total Discovered Gas Resources in Sabah
Sabah Gas Supply Network Infrastructure and

Demand Centres
Currently, there are two (2) major and active PSC in
Sabah that are supplying gas to the three (3) existing
demand centres via more than 300 km of gas pipelines.
The three (3) existing demand centres located
independently in Sabah and Wilayah Persekutuan
Labuan namely Sabah Gas Terminal (SBGAST) in Kg
Gayang, Tuaran and Labuan Gas Terminal 1 (LGAST-1)

and Labuan Gas Terminal 2 (LGAST-2) both are located
in Wilayah Persekutuan Labuan as shown in Figure 2.
Figure 2: Location of Demand Centres in Sabah / WP Labuan

By the end of 2013, a new demand centre known as
Sabah Oil & Gas Terminal (SOGT) in Kimanis, Sabah
will be on stream with a capacity of 1,250 mmscf/d.
This development would also include a construction
of Sabah-Sarawak Gas Pipeline (SSGP) from Sabah Oil
and Gas Terminal (SOGT) to PETRONAS LNG Complex
(PLC) in Bintulu.
This new demand center is expected to serve the new gas
customers located in Kimanis and Sipitang area mainly
for power, petrochemical and reticulation industries as
illustrated in Figure 3.
KIMANIS
Power
Petrochemical
SOGT
SIPITANG
Reticulation
Figure 3 : New Industries in Kimanis and Sipitang
Figure 3: New industries in Kimanis and Sipitang
Gas Supply to Kimanis and Sipitang

PETRONAS has committed a total of 250 mmscf/d
of daily gas supply (up to 1.83 tscf of gas resources)
for 15-20 years to the new gas customers in Kimanis
and Sipitang as shown in Figure 4.
Resources
(mmscfd)
300
Committed
250 mmscf/d
~1.83 Tscf for 15-20 years
200
200
2014
2019
2024
2029
2034
Year
Figure
Supply outlook
for Kimanis
Sipitang and
Customers
Figure
4:4 :Supply
outlook
for and
Kimanis
Sipitang
Customers
CHAPTER 3
INTRODUCTION
TO SOGIP
3.0 INTRODUCTION TO SOGIP

3.1 SOGIP Vision and Mission
Vision
To be the premier oil and gas industrial park of choice
for petrochemical hub in Asia Pacific.
Mission
M
aximize use of natural gas in Sabah aligned with
the Malaysia Economic Transformation Programme
and Sabah Development Corridor.
Develop SOGIP as petrochemical hub and as a
catalyst for oil and gas development in Sabah.
Create a value added supply chain in Sabah to
support domestic requirements in agro-industries.
Increase GDP and employment opportunities for
Sabahan.
Develop and optimise oil and gas related downstream
businesses.
Innovateand explore future needs focusing on
energies, food and environment.
Develop research and development centre for
petrochemicals products that will make Sabah selfsufficient, relevant and sustainable for its residents.
3.2 Land
SOGIP land size is 4,065 acres located in Mengalong,
Sipitang district. It is approximately 12 kilometres from
Sipitang town. The area is near to Sabah Forest Industries
(SFI) and situated to the west of SFI. The north of SOGIP
is the Brunei Bay shoreline. It is approximately 150km
south of Kota Kinabalu city centre which is accessible
via the Kota Kinabalu Sipitang Road. Time to travel
from Kota Kinabalu to Sipitang is about 2.5 hours.
The area of SOGIP has been earmarked for oil and
gas industry and downstream industries derived from
Ammonia and Urea. Out of the total 4,065 acres,
PETRONAS Chemical Group Berhad through PETRONAS
Chemical Fertilizer Sabah Sdn Bhd (PCFSSB) has
occupied 153acres for their Urea Plant known as SAMUR
which is currently under construction.
The existing site condition is flat, overgrown with shrubs
and other vegetation. A large part of the area is generally
sandy. Mangrove can also be found at the north eastern
section of the site. Paved roads are found at the front
portion of the site of SAMUR.
CHAPTER 4
SOGIP
MASTER PLAN
10 | SIPITANG OIL & GAS INDUSTRIAL PARK (SOGIP) MASTERPLAN
4.0 SOGIP MASTER PLAN
4.3 Benchmarking7
Since formation of SOGDC and SOGIP in 2010, the

development of the park has progressed to a critical
stage where a master plan is required to drive the
investment initiatives. As like all development of natural
hydrocarbon resources in Malaysia, PETRONAS is the
forefront partner in the development of the oil and gas
resources in Sabah.
In transforming SOGIP into the premier oil and gas

industrial park for petrochemicals in Asia Pacific, best
practices from three successful industrial parks have
been identified to be adopted. The three identified
industrial parks are Jamnagar Refinery Complex (India),
Jurong Island Development (Singapore) and Jubail
Industry City (Saudi Arabia).
4.1 Objective
4.3.1 Jamnagar Industrial Park
This document describes SOGIP master plan which

identifies and explores the potential industries in
developing SOGIP as a premier industrial park focusing
in the development of petrochemicals. This master plan
is aligned with Malaysias Economic Transformation
Programme (ETP) and Sabah Development Corridor
(SDC). It serves as a principal guidance to outline
and implement the planned development taking into
account the SOGIP strategic positioning and potential
investments based on gas and non-gas usage. Utilities,
infrastructures, incentives, promotions, statutory
standards and centralised approving authorities are also
outlined as key success factors.
Jamnagar, located in the state of Gujarat, has three

refineries owned by Reliance Petroleum and Essar Oil.
There are presently no major downstream facilities
located in Jamnagar. The total area for Jamnagar is
7,885 acres with total investment of USD14.3 billion.
The estimated jobs created are around 3,500 by the
year 2010. Refining and petrochemical are the two
main industries in Jamnagar. Reliances Petrochemical
Complex and Essar Oil Refinery are located at a distance
of 7 km from each other and are not integrated.
4.2 Terms of Reference

SOGIP master plan shall be principally guided by
the followings:
Gas availability
o P
hase 1: allocation of 90 mmscfd of natural gas
to SOGIP
o Phase 2: subject to future availability of gas and
the gas composition
Nature of the industries shall be based on methane
rich gas composition as feedstock or fuel
In alignment with ETP, SDC and Sabah Governments
aspiration of developing the oil and gas industries
Capability development of local residents of Sabah
to participate in the oil and gas industries
Retaining resources and value within Sabah and
Malaysia. Maximisation of value added to supply
chain in Sabah state
Integrated petrochemical complex with fertilisers as
the key products
Gas distribution to be developed for small medium
industries (SMI) Centralisation of utility facilities for
the optimisation of gas usage and the supply of
utilities
Enable socio-economic developments spinning-off
from SOGIP
Through analysis of the Jamnagar Industrial Park,

four best practices have been identified that greatly
promoted its growth and investors attractiveness;
1. Financial incentives
In Gujarat, many financial incentives have been
introduced under Special Economic Zone (SEZ)
schemes to reduce tax burden and provide a
competitive investment environment.
2. I ntegrated
pipelines
onshore
product
distribution
Both Reliance and Essar Oil refineries transport their

products to North India through integrated crude,
product and gas pipe-lines. This helps the refineries
to cut down on their distribution and transportation
costs.
Source : MPRC, Pengerang Masterplan Draft report Arthur D

Little
3. Superior refinery product slate

The refineries produce a high proportion of highvalue Liquid Petroleum Gas (LPG) and petrochemical
feedstocks such as propylene (adding to over 10%
on crude processed, compared to 2-3% for older
refineries). The refineries are of full conversion
type and have no production of low-value fuel oil
(compared to 12-20% on crude processed for simpler
refinery configurations).
4. Proximity to major crude supply

The industrial park is ideally located on the west
coast of India and has close proximity to the Middle
East, a major source of crude supply.
5. Dedicated infrastructure and utilities

The industrial park has their own dedicated power
plant, water and waste water treatment plants and
common port and terminals facilities.
3. Tight vertical and horizontal integration

Connection of adjoining industries in the value
chain through a common pipe network facilitates
the transfer of intermediate streams vertically and
horizontally between producing and consuming
facilities.
4. Human resource development

Chemical Industry Manpower Advisory Committee
(CHIMAC) and Chemical Process Technology Centre
were set up by the Singapore government to ensure
an adequate supply of quality manpower for the
petrochemical industry.
5. Stable government and business friendly

environment
Singapore is well known for efficient processes and
transparent systems, and ranks consistently among
the very top countries in the world in terms of ease
of doing business.
4.3.2 Jurong Island

Jurong Island is a man-made island located to the
southwest of Singapore, with an area of about 8,000
acres and act as a hub for the refining, petrochemical
and chemical industries. It is estimated around 8,000
jobs has been created with the total investment of
USD26 billion. The Jurong Town Corporation (JTC) is
Singapores principal developer and manager of Jurong
industrial estates and their related facilities.
Through analysis of the Jurong Island, five best practices
have been identified that have greatly promoted its
development and investors attractiveness;
1. Availability of critical mass

Three major refineries and a cracker were already
established before any land reclamation commenced.
Critical mass ensures security of supply and thus
attraction for downstream players to establish
facilities close to these sources, thereby reducing the
cost of transportation.
2. C
entralised service corridor and the Plug and
Play concept
Centralised provisioning of inputs, utilities and
services reduce investment requirement for primary
industry players as well as operating cost for all
investors across the island, making investment quick
and easy.
4.3.3 Jubail Industrial City

Jubail is an industrial city on the Arabian Gulf coast of
Saudi Arabia. The city is a hub for refining, petrochemical
and metals-based industries. The Jubail Industrial City
(JIC) development has been planned in two zones (JICI
and JICII); these zones are located side-by-side and
cover a total area of approximately 40,000 acres. It is
estimated around 55,000 jobs (for Jubail Industrial City
II) has been created with the total investment of SR65
billion (USD17.3 billion) in 2004. It is expected that by
2022, an additional SR200 billion (USD53.3 billion) of
investments will be attracted in Jubail Industrial City II.
The Royal Commission on Jubail and Yanbu (RCJY) is
the government body managing the development and
operations at the industrial cities of Jubail and Yanbu.
Through analysis of the Jubail Industrial City, four
best practices have been identified that have greatly
promoted its development and investors attractiveness;
1. High vertical integration

Development plans for Jubail focuses on high
downstream integration of petroleum based
industries for producing petrochemicals, fuels and
other feedstock. These outputs not only will increase
value-added exports but also provide critical raw
material for development of further downstream
industries, including fertilisers, cement, etc. for
domestic and export markets.
2. Efficiency of infrastructure concentration

Substantial investments have been made to
develop supporting infrastructure needed for the
petrochemical industry. Strategic locations have
been identified for infrastructure and utilities which
facilitate the most cost-effective and environmentally
sustainable development.
3. Development of human capital

Significant national investment programs in
advanced training have been made to meet the
national manpower demand which would be needed
for construction and later project operations in the
industrial city.
Arthur De Little Pengerang Master Plan Report

Photo Source: http://www.blpge.com
4. Availability of deep water port facility

The planned development of deep-water port to
accommodate required super tankers will be key
success criteria for development of the Jubail
Industrial City8
CHAPTER 5
INVESTMENT
SCENARIO &
INDUSTRIAL
PLANNING
ACTIVITIES
5.0 INVESTMENT SCENARIO & INDUSTRIAL ACTIVITIES PLANNING

5.1 Investment Scenario
SOGIP is the first oil and gas development in Sabah
focusing on petrochemicals. It will be the catalyst for
the development in Sabah along the west coast. The
development of the park must be aligned with ETP and
SDC for oil and gas sector and be beneficial to the state
of Sabah.
Sabah state and PETRONAS are partners in developing
the natural gas into methane based primary
petrochemicals such as ammonia and urea. Using these
primary petrochemicals, development of potential
downstream value added products such as ammonium
sulphate, ammonium nitrate, diammonium phosphate,
caprolactam and others are explored (Refer to figure 5).
Diammonium Phosphate (DAP) is one of ammonia
derivatives which main use is in production of NPK. DAP
is also suitable fertiliser to be applied for cash crops such
as vegetables and tubers. There are also opportunity
to create further value for production of high nitrogen
5.1.1 Advantages of Sipitang Oil and Gas

Industrial Park
SIPITANG
Figure 5: Location of Sipitang and SOGIP
fertiliser such as fertiliser grade Ammonium Nitrate

which could also be used to assist in the growth and
metabolic processes that plant undergoes.
Investment in SOGIP can be expanded into manufacturing
of other chemicals using the available petrochemicals
from nearby manufacturers such as methanol from
Labuan. Other products that can be manufactured in
SOGIP through this route are other solvents, bio diesel
and glycerine (for cosmetics and pharmaceuticals
industry).
Support service industries like Centralised Utilities
Facility (CUF), fabrication yards for pressure vessels,
sea crafts and offshore structure are also planned. Basic
infrastructure (road, drainage and port facilities) and
utilities (electricity, water and telecommunications)
will be made available at SOGIP for investors to utilise
in operating their businesses. Special tax incentives
are available to the benefits of the investors. (Refer to
Chapter 10 Incentives and Promotions)
5.1.2 Investment in SOGIP

SOGIP is to be developed as an integrated industrial
park designated for oil and gas industry. SOGIP has the
following strengths as an integrated industrial park:
It is expected that SOGIP will be developed over two

phases spanning from 2014 to 2024 (Refer to Figure 8)
with participation from multiple investors.
The availability of natural gas from offshore Sabah

Strong partnership between Sabah state and
PETRONAS
Availability of 4,065 acres of land for development
Strategically located nearby to major shipping lane
and close proximity to Labuan and Brunei
Sheltered bay and sufficient water depth (16m
25m) to cater for Single Buoy Mooring (SBM) for
Very Large Crude Carriers (VLCC) and availability of
vessel anchorage
Opportunity of tax incentives to SOGIP investors
Minimal impact on relocation of local residents
Gas city gate within the industrial park tee-off from
the Sabah Sarawak Gas Pipeline
Proximity to trunk road that connects Sarawak and
Brunei to Sabah
Synergy between on-going SAMUR project and
SOGIP masterplan will convert SOGIP into a fertiliser
hub which in return provides opportunities for
investors to create downstream industries
Readily available market where agriculture is a major
industry in Sabah
Phase 1A: Planned Investment by Investors
The location of SOGIP as shown in Figure 5 is ideal for

the development of integrated petrochemical complexes
focusing on agricultural products, bio feed, renewable
energy and other chemical products for cosmetics and
pharmaceutical uses.
1. Fertilisers
i. Ammonia Plant
ii. Ammonia Derivatives
iii. Urea Derivatives
2. Bulk Storage
i. Bulk Oil Storage
ii. Bulk Refined Petroleum Products Distribution
Terminal
3. Other Investments
i. Bio Based Industries
ii. Fabrication (shipping, onshore and offshore
structures)
iii. Refinery
4. Utilities
i. Centralised Utilities Facility (CUF)
ii. Gas Reticulation
Phase 1B: Planned Development by SOGIP

1.

Infrastructure
i. Road and Street Lights
ii. Drainage
iii. Port and Jetty
iv. Telecommunications
Phase 2: Planned Future Investment (Subject to

future availability of gas)

1. Methanol Derivatives
2. Ammonia Derivatives
3. Urea Derivatives
4. Other Industries
Fertilizer :
agriculture
Methanol
Oversupply of market
Insufficient gas volume
for world scale plant
Fertilizer :
palm/rubber
Caprolactam
Ammonium
Sulphate
Methane
Rich
Natural
Gas
Diammonium
Phosphate
Ammonia
NPK
Ammonium
Nitrate
Melamine
Urea
Ammonium
Chloride
Power
Generation
UF
Power demand in Sabah is

limited
100mmscfd = 600 MW
Note : ethance volume is not sufficient to develop ethylene and derivatives complex
UF - Urea Formaldehyde

5.2.1 Fertilisers
Fertiliser is a key industry that supports global challenge
in food production. The need for improvement in
food production and quality create higher demand in
fertilisers. Both demand and supply forfood is expected
to grow rapidly for the next 20 years in line with the
growth of population. SOGIP aspires to provide
total fertilisers solutions to the agriculture industry,
supporting Sabah state as the largest producers of palm
oil in Malaysia. Seven (7) value added products have
been identified for investment within this cluster namely
ammonia, urea, NPK, ammonium nitrate, caprolactam,
ammonium sulphate, and diammonium phosphates.
Spearheading SOGIP development is the currently
ongoing construction of SAMUR9. SAMUR project will
cost approximately RM4.6 billion (USD1.5 billion) and
will produce about 1.2 million tonnes per annum of
granulated urea. Once completed, SAMUR will be the
largest single train granular urea facility in South East
Asia, transforming Sabah into one of the regions largest
producers of fertilisers.
Source: PETRONAS Chemicals Group Berhad
Fertilizer :
cash crops
Artificial
fibre
Figure 6: Potential
ammonia and urea
derivatives to be
developed
Fertilisers from this facility will be exported to lucrative

overseas markets. However, a sizeable volume will be
made available to serve Sabah states rapidly growing
agricultural sector.
A new ammonia plant is also being planned in SOGIP
slated to be commissioned in 2018. The investment
of new ammonia plant is expected to bring Gross
National Income (GNI) of approximately RM646 million
by year 2020. The products will be used as feedstock
for ammonia derivatives, which in turn will be used as
fertilisers for cash crops, tubers, paddy and palm oil.
The investment in ammonia derivatives production
such as caprolactam will potentially pave way to
further downstream products such as Nylon 6 which
subsequently lead to the growth in textile and
engineering plastic industry in Sabah state.
The future investment opportunities for fertilisers
industry in SOGIP are in Agrochemicals and Enhanced
Efficiency Fertilisers. Agrochemical products such
as herbicide and pesticide, and Enhanced Efficiency
Fertilisers such as coated fertilisers will provide further
solution to the agriculture industry.
5.2.2 Gas Distribution
5.2.4 Refinery
A joint venture company between Sabah Energy

Corporation (SEC) and PETRONAS Gas Berhad (PGB)
is committed to provide gas distribution infrastructure
with a total investment estimated to be around
RM 40 80 million. With this infrastructure, SMI in SOGIP
can leverage on the availability of natural gas from the
nearest tee-off point at the gas distribution network
(pipeline).
Subject to future economic feasibility study and

depending on market demand of the refined petroleum
products, a refinery to process crude oil will be
considered in the first phase.
Total of 15 mmscfd of natural gas will be allocated

ascatalyst for the SMI especially in the areas of
waste treatment and incineration, metals preheating
(particularly for iron and steel), drying and
dehumidification, glass melting, food processing and
fuelling industrial boilers.
5.2.3 Bulk storage

Bulk storage terminal for both crude oil and petroleum
products are potential investment opportunities in
SOGIP.
Annually, an estimated 420,000 barrels of crude oil and
730,000 barrels of petroleum products (refer to figure
7) are consumed daily across Asia. Petroleum product
imports and exports for China, India and Southeast Asia
are expected to increase by 1.8 million barrels per day
from 2010 to 2020. The implications on oil storage are
two-fold10;
1. T
he continued growth in demand for energy in this
region will drive a need for increased storage capacity
of crude oil and refined petroleum products.
2. Increased inflow of crude oil from Africa and Latin
America would result in longer transit times and
translate into a need for larger buffer storage of
crude oil.
With close proximity to major shipping routes, land
availability and deep water marine accessibility, Sipitang
is well positioned for oil storage terminals.
Distribution of refined petroleum products such as diesel
and gasoline to nearby areas are not currently available.
Hence, the bulk storage facility will also function as a
distribution terminal in SOGIP.
Economic Transformation Programme (ETP)
10
In the area of oil related investment, a refined product

distribution terminal is a value added operations to
be included in SOGIP. This terminal will serve the local
transportation operations by providing diesel, gasoline,
Jet A1, kerosene and marine fuel oil (MFO) for bunkering
operations.
5.2.5 Other Investments

Other investments that require minimal gas volume as
part of the manufacturing process will be assessed.
These potential investments must satisfy all the prerequisites as depicted in the guiding principles.
In the case of bio based industries, bio-protein feed
manufacturing has been identified. It uses natural
gas as fuel and feedstock to manufacture amino acid
based protein product suitable for use within Sabah
and Malaysia. The bio-protein is mixed with fibres and
minerals for use as animal feeds which supports SMI
industry in SOGIP.
Marine services, ship buildings and repairs, onshore or
offshore structure fabrication bode well into SOGIP
Master Plan because of the accessibility to the various
oil and gas operations in East Malaysia.
SMI has potential to be developed based on required
support and services for the fertilisers hub such as
technology driven industries such as packaging,
warehousing, logistic, ICT service (refer to Chapter 7,
section 7.2).
Asias appetite for crude oil is continuing to

grow at 420 kbd per year
Growth in Asia crude consumption
Asias crude sypply will take longer to arrive

Comparison of crude supply distribution
23.7
Growth rate
of 420 kbd
per year
2005
2015
Percent of Asia crude oil source
Million barrels per day
Average transit
time (days)
10.9
14.3
+2.1
21.6
41
+2.1
55
53
32
3
19.5
Regional
2005
2010
2015
Arab Gulf
15
Europe/
Africa/
Med
Latin
America
Distance to Asia
Source: ETP Report
Figure 7: Growth in Asia Crude Consumption & Comparison of crude supply distribution

Subject to the future availability of gas, phase 2 SOGIP
development will focus on methanol derivatives,
ammonia derivatives, urea derivatives and other
industries.
5.3.1 Offshore and supply base services

SOGIP is an ideal location for offshore structures
fabrication and repairs of floating installation. Sipitang
is blessed with sheltered bay and it is accessible
throughout the year.
With high expectation on investments and establishment
of port facilities in SOGIP, there is a potential for a
fabrication yard to be set up and provide engineering
and construction services. Sabah is surrounded by
offshore oilfields which make it feasible for SOGIP to be
another supply base complementing Labuan.
5.3.2 Marine services - Ship Fabrication and

Repairs
SOGIP location is suitable for shipbuilding and repairs
operations due to its access to shipping routes and
sheltered bay.
Ship and supply vessels refurbishment and repair can be
easily carried out during monsoon season.
5.3.3 Bio and Renewable Energy Biotechnology Research Centre

With the proposed implementation of the B10 standards11, bio diesel industries should be in demand from mid-2014.
B10 standard requirement proposes retail diesel to incorporate 10% of bio-diesel.
This move is proposed to reduce the dependency of fossil fuels and also to encourage the development of the bio
fuels industries.
Bio-diesel production requires methanol and palm oil as feedstocks. Methanol is available from Labuan and palm oil
from the area surrounding Sipitang, making this an ideal location for centralised development of bio fuels technology.
A by-product of this process is glycerine which is a good base for many pharmaceutical and cosmetic products.
B10 standard is 10 per cent palm biodiesel with 90 per

cent petroleum diesel.
11
Phase 1
INDUSTRIES
PETROCHEMICAL & FERTILISERS
MARKISA (Ammonia Plant)
Ammonia Derivatives
Urea Derivatives
Methanol Derivatives
Bio-based Industries
BULK STORAGE & HEAVY INDUSTRIES
Bulk Storage
Bulk Products Distribution Terminal
Oli Refinery
Fabrication Yard
Ship Repair Services
SUPPORTING INDUSTRIES
Transportation
Warehouse (Storage Facilities)
Packing
Printing
SMI
UTILITIES & INFRASTRUCTURE
Road, Streetlights & Drainage
Electricity, Water & ICT
Centralised Utilities Facility (CUF)
Gas Reticulation
Port & Jetty
Phase 1
Phase 2
Phase 3
Phase 4A
Phase 4B
Figure 8 : SOGIP Development Plan
Phase 2
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
CHAPTER 6
LAYOUT
PLANNING
6.0 LAYOUT PLANNING

Conceptually, SOGIP will attract a variety of investments
in different manufacturing and operations. Some of the
operations include hazardous and toxic materials which
require special handling. Therefore, zoning criteria is
developed based on the followings:a. Safety consideration (flammable, toxic and
explosiveness of materials).
b. Logical layout of manufacturing operations to reduce
piping runs.
c. Reduce traffic congestion and unnecessary
movements within the park limit by clustering related
industries.
Land size can be custom fit to investors need to optimise
the land usage.
Sea front land parcels are reserved for special
requirement such as port facilities, marine and offshore
services and supply base.
Figure 9: Layout Planning of SOGIP
CHAPTER 7
SUPPORT
SERVICES
PLANNING
Photo source :http://commons.wikimedia.org
7.0 SUPPORT SERVICES PLANNING
7.2 Support Services Planning in SOGIP
7.1 Support Services Planning in Sipitang
With several clusters of industries being set-up within

SOGIP, ranging from oil refinery and petrochemicals,
number of supporting services has been identified in
order to support the overall function of the industries
and SOGIP as a whole. List of potential services are as
below:
SOGIP will be supported by external common facilities

and supporting services to complement the park and
beneficial to Sipitang development. These facilities
include:

Office Complexes
Housing
Hospital
Schools and Training Centres
Commercial Complex
Security
Fire Fighting
With the availability of these facilities, SOGIP will

be fully supported as an industrial park. SOGIP will
directly or indirectly carry out its corporate and social
responsibilities for the employees within SOGIP and for
the people of Sipitang district as well.
Packaging
o Packaging of products that are produced in
SOGIP.
Printing
o Labelling of end products for identification
purposes.
Transportation Services
o For transporting or delivering raw materials,
finished goods or other products to destination.
Warehousing Facilities
o As a base for storage of products, dry and break
bulk and other materials before delivery.
Competitiveness of SOGIP shall be enhanced by
development of identified infrastructures and facilities.
The planned central warehousing facilities will support
the investment in SOGIP in raw material and product
handling, storage and distribution.
A central warehousing facility is necessary for the storage

of certain products that are required by the industry
users before it is transported out of SOGIP. There are
two types of warehouses that will be made available in
SOGIP to cater for the different type of goods produce
or imported by the user of the industrial park; warehouse
for hazardous goods and non-hazardous goods. There
are several types of hazardous goods, which are:

o
o
o
o
o
o
o
o
Gaseous Materials
Inflammable Liquids
Inflammable Solids
Materials containing peroxides, easily oxidising
contents
Substances highly toxic
Radioactive substances and materials
Erosive Materials
Other hazardous materials and substances
miscellaneous in nature
Safety management system is to be in-place in
managing the warehouse which holds hazardous
goods. Hence, segregation for hazardous goods
and non-hazardous goods is crucial in ensuring
the safety of the products.
Scheduled Waste Management

o Handling scheduledwaste within SOGIP.
o Scheduled waste shall be collected and disposed
by government approved service provider. SOGIP
is exploring the possibility of providing the
services.
o Scheduled wastes are exemplified as wastes or a
total combination of wastes that has a significant
present or possess conceivable hazard to the
health of humans and living organisms. This
excludes municipal waste and municipal sewage.
Scheduled wastes are broadly defined into the
categories of chemical wastes, biological wastes,
explosives and radio-active wastes.
o Scheduled waste shall be collected and disposed
by a government approved service provider.
SOGIP is exploring the possibility of providing
the services within the Industrial Park as to avoid
illegal waste dumping as well as to maintain the
eco-system.
Human Resource Training Facility

o A centre to conduct and provide human capital training for the industries within SOGIP.
ICT Services
o Provide telecommunications and broadband network services in SOGIP.
Bonded Area
o To increase interests from investors, SOGIP plans to have a bonded area around its vicinity. The availability
of bonded area is to facilitate increase import goods to Sabah which will result in the possibility of creating
businesses for the locals and SOGIP.
Helipad Facilities
o Helipad facilities will be planned within SOGIP for emergency uses and as alternative to land transportation.
CHAPTER 8
INFRASTRUCTURE
PLANNING
Kertih Integrated
Petrochemical
Complex
Kertih IPC principally consists of
ethylene-based petrochemical
plant and the plants are integrated
with common shared infrastructure
facilities and process plants.
8.0 INFRASTRUCTURE PLANNING
8.3 Land and Site Preparation
In order to enhance the development of SOGIP, an

integrated planning of infrastructure is required. Among
the facilities that would be beneficial to the overall
development of the industrial park are:
8.3.1 Site Preparation
Roads
Ports and Jetty
Land and Site Preparation Land Arrangement
Other common facilities (telecommunications, etc.)
8.1 Roads
The road network within SOGIP will be of an industrial
standard to cater heavy machineries and lorries that
would frequent the industrial users premise. Paths and
types of the roads shall abide to the industrial standards
as well. The connectivity and linkages shall be designed
in a way to provide minimal congestion and better
access for the industrial users inbound and outbound
transportation in SOGIP.
A single carriageway of an industrial standard shall be
constructed to cater for the movement of goods or raw
materials by prime movers and lorry trailers that would
be transported to SOGIP. However, there is a need of
future expansion for dual carriage way in SOGIP.
8.2 Port and Jetty Facilities
Basic infrastructures to support the site preparation

such as access roads, drainage and street lighting will
be developed within SOGIP. Investors will undertake
the site clearing, earthworks and develop the selected
plot of land within their respective boundary limit.
Since oil and gas downstream industries utilises heavy
machineries and equipment, the site may need heavy
duty reinforcement or piling. With this regards, investors
shall be able to develop the selected area according to
their respective needs.
8.4 Land Allocation Process

A structured registration process will guide investors in
acquiring or leasing the land required for investment in
SOGIP. The following are required for registration:
A project description
A project socio-economic feasibility study to show
that the project will have positive contribution to the
Sabah State
Full disclosure of shareholders
The company objectives and business plan
The company governance policy and organisation
structure
Financial plan to support the project
For SOGIP, a port will be planned for cargo handling

and process of goods movement by ocean freight to
cater for the industry users. The port facilities such as
cranes, loading arms and cargo storage will abide to the
requirement of the users product type and output.
Upon submission of this information, SOGDC will evaluate

the viability, strategic fit of the business and alignment
to the overall SOGIP master plan. Once evaluation is
completed, SOGDC will issue a letter of offer stating the
initial conditions to the potential investor.
A multipurpose jetty is required for the overall use and

outbound of products for the users of SOGIP. Based on
the output and requirements of the industry users, this
multipurpose jetty would provide ship docking facility,
loading and unloading of cargo and other facilities such
as the conveyor belt.
The final land allocation will be determined according to

SOGDC prevailing policy.
The management and operation of the port and jetty

will be outsourced to third party e.g. Sabah Port Sdn
Bhd.
CHAPTER 9
UTILITIES
PLANNING

9.1 Centralised Utility Facilities (CUF)
Figure 10: Comparison between common concept and centralised utility concept
As the industrial park owner, SOGIP plans to set up a Centralise Utility Facilities (CUF) which will provide added
advantages to the investors. Taking the advantage of economic of scale, CUF is proposed to support the development
of the industrial park. In addition to a reliable supply of utilities, other added advantages are;
Lower initial CAPEX investment for tenants
Optimisation of production cost by reducing any duplication of equipment and manpower
Better focus onto their core business
List of Utilities:
Electricity
Steam
Cooling Water
Industrial
Gasses
Demineralise
Water
Waste Water
Treatment
9.1.1 Electricity and Steam

Taking into consideration of adding more value to the
natural resources, CUF will be generating electricity and
steam using Combine Generation (COGEN) system.
Acknowledging the importance of stable and reliable
electricity supply for oil and gas industries, SOGIP with
its partner, PETRONAS Gas Berhad (PGB) shall ensure
electricity supply will be stable and reliable. PGB have
more than 10 years of experience operating CUF in
Kerteh, Terengganu and Gebeng, Pahang.
To increase the reliability, connection to SESB grid for
stand by supply is essential. It is expected that the
demand for electricity by the industries in SOGIP will
be at 118 MW in the next five years. SESB is planning to
construct a new 275kV transmission line from Kimanis to
Sipitang as currently the transmission line that is available
is 33kV which is not sufficient for SOGIP12. As this is part
of SESBs master plan for Sabah, implementation of this
project will be implemented sooner or later but only
Sabah Oil and Gas Development Lab Report
12
subject to the availability of funding. With this, SESB

requires a land size of 40 acres for its substation and
PMU.
Another essential utility in industrial operation is steam
due to its vast usage in industries; i.e. sterilisation,
cleaning, moulding, pipe and vessel jacketing. Generated
from the COGEN system, steam shall be made available
to SOGIPs tenant with significantly small CAPEX
investment (mainly for the pipeline) compared to selfgeneration. Centralising the production of steam will
also eliminate the need for each tenant to fulfil DOSH
requirement.
9.1.2 Waste Water Treatment

Protecting the pristine and precious Sabahs natural
environment, waste water treatment is very crucial
to reduce the impact of industrialisation towards
environment. CUF shall provide the service to treat the
waste water before discharging it.
9.2 Water Supply
9.3 Telecommunications
Currently, there are two (2) sources of water supply

servicing Sipitang which are Mesapol water treatment
plant and Kampung Ulau water treatment plant both
generating 4 MLD and 15 MLD respectively. By the
first quarter of 2014, a new water treatment plant will
completed with the capacity of 40 MLD which 27 MLD
will be catered for SAMUR.
A high speed telecommunication network is

planned for SOGIP. A private entity will provide the
telecommunication services for the various operations
such as:a. High speed fibre optic network for voice call and
computer communication
b. Network for security surveillance to protect high
value investments
By 2017, the demand for water supply in SOGIP will be

at 91.2 MLD and by the following year and onwards the
demand would increase to 111.2 MLD. With these huge
demands being needed, a new water treatment plant
must be constructed to supply to these industries
in SOGIP. As of now, the Sabah Water Department is
preparing a proposal to conduct a study on a new source
of water supply for Sipitang district which includes a
study on the environmental impact and climate change.
CHAPTER 10
INCENTIVES &
PROMOTIONS
Putrajaya
Located 25km south of
Kuala Lumpur, it serves as an
administrative centre of Malaysia.
Photo source :http://www.puim.my

10.1 Incentives
Incentives are an important factor in attracting investors
into the industrial park.
On 1st November 2012, Federal Treasury has approved
the following blanket financial incentives for the relevant
activities in SOGIP.
The following incentive policy applies to all applications
received by SEDIA up until 31st December 2020.
Manufacturing (Downstream activities)

Medium & heavy industries
Urea & ammonia production
Solar glass
Ship building & repairs
Marine supply base & fabrication yard
Iron ore pelletizing
Hot briquette iron
Combined cycle power plant
F
ull income tax exemption for a period of 10 years;
or 100% investment tax allowance (ITA)
100% of eligible expenses incurred and deducted
100% of statutory income for a period of 5 years
(subject to the products / activities promoted
under the Promotion of Investments Act 1986)
Shipbuilding and ship repair industry
F
ull income tax exemption for a period of 5 years;
or
100% investment tax allowance incentive (ITA) of
eligible expenses incurred and deducted 100% of
statutory income for a period of 5 years
For land development purposes, investors who are eligible for facilitation fund can apply through UKAS (Public
Private Partnership Unit) for a certain amount of compensation for the land development cost.
10.2 Promotions
There are a number of promotional programs that SOGIP have come up with. They are:
Investment Opportunities Program
Employment Opportunities Program
Business Opportunities Program
Each of the programs has its own function to realise SOGIPs ambition to promote the industrial park as well as to
perform its corporate and social responsibility (CSR) for the state of Sabah. The figure below shows the objectives,
activities that will be done and the benefits.
Objective
1
Investment
Opportunities
Programme
To promote SOGIP
to attract domestic
and foreign
investors
Utilise social media and website as a platform

for investors to register interest
To promote
employment
opportunities in
SOGIP
Organise talks and road shows at schools and

local universities, training academies &
institutions
Employment
Opportunities
Programme
Business
Opportunities
Programme
Activities to be done
To promote
business
opportunities in
SOGIP to local
business owners
Participate in state, national and international

level conferences and seminars
Benefits
Increase the
investment in
SOGIP
Provide income to
SOGIP
Employment to
local Sabahan
Advertise in social media, website,

newspapers and magazines
Identify list of business opportunities in SOGIP
Create a platform for businesses to register
their company profile
Advertise tenders via various platform,
website, magazines and local newspapers
Figure 11: Promotional Programmes in SOGIP
Provide
opportunies for
local contractors to
participate in
contracts derived
from SOGIP
Other than organising its own conference, seminar and

exhibitions, SOGIP will also ride on promotional activities
by the Federal and Sabah state agencies such as MITI,
MIDA, MATRADE, MID, MPRC and SEDIA in order to
promote SOGIP locally and abroad.
SOGIP needs to create its corporate website to easily
disburse information to potential investors intending to
accumulate information on SOGIP.
CHAPTER 11
IMPACTS &
BENEFITS TO
SABAH STATE
Photo source :http://www.mymalaysiabooks.com
11.0 IMPACTS & BENEFITS TO SABAH

STATE
SOGIP is an integrated industrial area designated for oil
and gas related industry. This industrial park will provide
several impacts and benefits to the state of Sabah as
the following:
1. Creation of job opportunities for Sabahans.
2. Economic spin off to spur further downstream
activities.
3. Attract foreign direct investments and facilitate
technology transfer
4. Bring development into Sipitang and nearby districts
i.e. Beaufort, Tenom and Keningau through spill over
effects.
5. Reduce Sabah imports of fertiliser to support local
agriculture industry.
CHAPTER 12
SOGIP
DEVELOPMENT
PLAN
12.0 GOVERNANCE STRUCTURE

SOGIP is the first dedicated oil and gas industrial park in
Sabah. SOGIP which shall be managed by a professional
park developer will be a liaison to various governing
bodies and agencies. In addition, SOGIP shall support
investorsto establish their business in the industrial park.
An effective governance structure is key for SOGIP to
achieve its task efficiently.
12.1 Proposed Governance Structure
SOGDC has envisioned a one stop centre concept to

service and aid its future investors for approval process.
Currently SOGDC owns SOGIP and is also responsible to
manage and market the industrial park. SOGDC scope
is not designed for statutory requirements approval
and therefore a one stop centre is needed to expedite
compliance with statutory requirements. Figure 13 is the
proposed governance structure to realise the one stop
centre concept.
Compliance to states statutory requirements is the

initial steps for establishing a business in SOGIP. List of
approvals for the various regulatory requirements as per
Appendix I.
Figure 12: Proposed Governance Structure
With the new structure SOGDC would be an intermediate

body that will expedite statutory requirements for
investors within SOGIP. In the new SOGDC will be
chaired by the Chief Minister of Sabah and consist of top
government official. The body does not override current
powers of respective statutory bodies but act as enabler
for statutory requirements.
SOGIP will be incorporated and design to cater solely on

SOGIP development whilst policy matter will be handled
by SOGDC. Thus SOGIP will be the one stop centre for
the investors and any regulatory approval would be
submitted to SOGDC for accelerated approval.
Figure 13: SOGIP Organisational Chart
12.2 Statutory Requirements

As an industrial park related to Oil & Gas and heavy
industries there are several statutory requirements
that need to be observe. Statutory requirements are
legal requirements set by local authorities to engage
in a particular activity. Failure to comply with these
requirements will result in legal directive to cease
activity. Statutory approval may be in the form of
official approval, license, registration or permit. It should
be noted that certain statutory requirements would
influence the industrial park layout.
12.2.1 Initial Statutory Requirements

For the initial development of SOGIP the main statutory
requirement would fall under the Environmental Quality
Act (EQA) 1974. Under this act the regulation thereunder,
industrial activities are required to obtain the following
approvals from the Director General of environment
quality prior to project implementation:
a. Environmental Impact Assessment (EIA)
b. Site suitability evaluation
c. Written permission to construct
d. Written approval for installation of incinerator, fuel
burning equipment and chimney
e. License to occupy and prescribed premises and
prescribed conveyances
The initial EIA would also serve as a global EIA for

investor pertaining to management of earthworks.
However it should be noted that earthwork activities
by investors involving more than 40,000 cubic metric
would require an individual EIA.
12.2.2 Industry Specific Statutory

Requirements
There are two main regulatory bodies pertaining to
environmental issue. These bodies are the Environmental
Protection Department (EPD) and Department of
Environment (DOE). EPD is a state department that
is responsible for the approval and management
of earthworks. DOE is a federal department that is
responsible for the assessment and approval of the
process engineering works that is normally associated
with investors facilities. In addition to environmental
statutory requirements there are other related statutory
requirements that would be relevant to the investors
within SOGIP.
In order for a business entity to legally start operating it
businesses several statutory needs to be complied. This
compliance will be in the form of licensing, which could
be a general licence, an industry specific licence or
activity specific licence. Business licences are required
by legislation and administered by various government
agencies, statutory bodies and local authorities. Business
licences could be categorised under three categories.
1. General Licences
General licences are a requirement and shall be
applicable once the investor has decided to incorporate
a company. List of general licence are as follows:
Company Registration
Company and Employees income tax registration
Employee Provident Fund
Social Security Organisation
Human Resources Development Fund
2. Sector Industry Specific Licence

This type of licence is industry specific. Examples of
these licences are as follows:
Manufacturing Licence
Telecommunication Licence
Broadcasting Licence
Oil Exploration Licence
3. Activity Specific Licences

Activity Specific Licences are licences to regulate a
particular activity. These type of licence requires investor
to comply with a sets of specific guidelines designed to
protect the interest of the citizen, employment, safety
of workers, environment and general public. Examples
of the licences are as follow:
Certificate of Fitness for Certified Machinery
Approval for Expatriate Post
Approval to install/resite/alter Air Pollution Control
Equipment (Bagfilter and Chimney)
Building Plan Approval
Sales Tax Licence
In addition to general business licence and the basic
approval from the Director General of Environment
Quality under the EQA 1974, investor may need to
adhere to other statutory requirements that are relevant
to their respective industries. The possible relevant
statutory requirements for industries are as follows:
a. Written notification to Director General to carry out
work on solid waste transfer station or land fill, or
construct on land any facility or building that may
produce leachate
b. Written notification to Director General on changes
of industrial activities that may cause discharge of
effluent or mixed effluent
c. Comply with gaseous emission regulation
d. Stack Gas Emission Standards from Environmental
Quality (Clean Air) Regulations 1978
e. Recommended Air Quality Guidelines (Ambient
Standards)
f. Sewage discharge Standards
g. Industrial effluents discharge limits
h. Leachate discharge limits

i. Prohibitions on Ozone Depleting Substance (ODS)
j. Environmental
Quality
(Schedule
Wastes)
Regulations 2005
k. Environmental Quality (Prescribed Conveyance)
(Schedule Wastes) Order 2005
l. Environmental
Quality
(Prescribed
Premises)
(Schedule Wastes Treatment and Disposal Facilities)
Order 1989
m. Environmental
Quality
(Prescribed
Premises)
(Schedule Wastes Treatment and Disposal Facilities)
Regulations 1989
n. Customs (Prohibition of Export) Order (Amendment)
(No. 2) 1993
o. Customs (Prohibition of Import) Order (Amendment)
(No. 2) 1993
CHAPTER 13
SOGIP KEY
SUCCESS
FACTOR
13.0 SOGIP KEY SUCCESS FACTOR

In supporting the implementation of this SOGIP master
plan, the following key success factors have been
identified:i. Availability of Funds
Federal and State Governments support in
providing funds for infrastructure development
as a tipping point to bridge project viability gap
SOGDCs business model need to be sustainable
to cater for future expansion of the industrial park
ii. Financial Incentives for Investors
The Ministry of Finance had approved tax
incentives to be listed under the Sabah
Development Corridor. The approved incentives
under SOGIP is Full tax exemption on statutory
income for 10 years; or Investment Tax Allowances
of 100% on qualified capital expenditure for 5
years
iii. Human Capital Development
Human capital programmes and training centres
are required to be built government to ensure
an adequate supply of quality manpower for the
industry
iv. Centralised Service Concept
Centralised provisioning of inputs, utilities and
services reduces investment requirement for
industry players as well as operating cost for all
investors across SOGIP, making investment easy.
v. Efficiency of Infrastructure
Dedicated internal infrastructure in the industrial
park such as roadways, ports, electricity, water
supply, telecommunication and etc.
Port
facility
development
planned
to
accommodate both traffic and vessel types (ie.
VLCCs)
vi. One Stop Service Centre
One Stop Service Centre for all governmental and
logistical functions
APPENDICES
APPENDICES
I. Governance Structure
List of Authority
Bil.
Authority
State of Sabah
Federal
Pejabat Ketua Menteri Sabah
Majlis Daerah Sipitang (MDS)
Pejabat Daerah Sipitang
Jabatan Perancang Bandar Dan Wilayah Negeri
Jabatan Keselamatan Dan Kesihatan Pekerjaan (DOSH)
Jabatan Bomba Dan Penyelamat Malaysia (BOMBA)
Sabah Electricity Sdn Bhd (SESB)
Suruhanjaya Komunikasi Dan Multimedia Malaysia (MCMC)
Jabatan Penerbangan Awam Malaysia (DCA)
10
Telekom Malaysia
11
SIRIM
12
Jabatan Alam Sekitar (JAS)
13
Jabatan Perlindungan Alam Sekitar (JPAS)
14
Jabatan Kastam Diraja Malaysia (JKDM)
15
Jabatan Kerja Raya Sabah (JKR)
16
Lembaga PerlesenanTenaga Atom (AELB)
17
Jabatan Air Negeri Sabah (JAS)
18
Jabatan Pengairan Dan Saliran Sabah (JPS)
19
Jabatan Kesihatan Negeri Sabah (JKNS)
20
Jabatan Tenaga Kerja (JTK)
21
Suruhanjaya Tenaga (ST)
22
CIDB
23
Jabatan Imigresen
24
Jabatan Pengangkutan Jalan (JPJ)
25
Jabatan Tanah Dan Ukur Negeri Sabah (JTU)
26
Lembaga Pelabuhan Dan Dermaga (JPDS)
27
Lembaga Pelabuahan-Pelabuhan Sabah (LPPS)
28
Jabatan Laut Malaysia Wilayah Sabah (JLM)
29
Polis Diraja Malaysia (PDRM)
30
State Economic Planning Unit (EPU)
31
Jabatan Perhutanan Sabah (JPHT)
32
Ministry of Consumer Affair
33
Ministry of Finance (MOF)
34
Jabatan Keselamatan Kerajaan Malaysia, Jabatan Perdana Menteri
35
Ministry of Trade and Industry Malaysia
36
Malaysia Investment Development Authority (MIDA)
37
Jabatan Hasil Bumi Negeri Sabah
38
Penolong Pemungut Hasil Tanah (PPHT)
39
Jabatan Hal Ehwal Agama Islam Negeri Sabah (JHEINS)
40
Jabatan Pertanian Sabah (Persatuan Peladang Daerah Sipitang)
ACKNOWLEDGEMENTS
ACKNOWLEDGEMENTS
The Sipitang Oil & Gas Development Corporation (SOGDC) team would like to thank the staff of PETRONAS,
Institute for Development Studies (Sabah), PEMANDU and Malaysia Petroleum Resources Corporation (MPRC) who
assisted in preparing this Master Plan:
Company
Names
Malaysia Petroleum Resources Corporation
Mohammad Fadhli Jamaluddin

Dimple A/P Kerisnin
Justin Chia Ju Sian
PEMANDU
Mohd Taufik Abd Mujib
PETRONAS
PETRONAS Chemicals Group Bhd.

A Aziz Othman
Jamuri Zen
Norizan Yahaya
Fadzilatun Ahmad
Johan Arief Ibrahim
M Zameer Zahur Hussain
PETRONAS Malaysia Gas Management and Petroleum
Management Unit
Faizal MydinPitchay
Ahmad Johari Jaffar
Karen Tony Sulil
Majangkim
Ku Nor Azmira M Roslim
Noor AzlinaMorad
PETRONAS Gas Bhd.
Fairuz Roslan
A Mufashshal
Roslin Farih
Hamshi M Fatmi
PETRONAS Sabah Labuan Regional Office
Julita Ontol
Roslan Ahmad Nordin
Industry Advisor SOGIP
Dr Chuah Chen Heng
Institute for Development Studies (Sabah)
Joe Ang Chang Leong

Juliana P.J. Ringgingon
Mohd Azmir Ramli
ABBREVIATIONS
ABBREVIATIONS
CHIMAC
Chemical Industry Manpower Advisory Committee
PCG
PETRONAS Chemicals Group Bhd.
CUF
Centralised Utility Facilities
PEMANDU
Performance Management And Delivery Unit
DOE
Department of Environment
PGB
PETRONAS Gas Berhad
EIA
Environmental Impact Assessment
PETRONAS
Petroliam Nasional Berhad
EPD
Environmental Protection Department
PLC
PETRONAS LNG Complex
EQA
Environmental Quality Act
ODS
Ozone Depleting Substance
ETP
Economic Transformation Programme
RCJY
Royal Commission on Jubail and Yanbu
GDP
Growth Domestic Product
SAMUR
Sabah Ammonia-Urea
JIC
Jubail Industrial City
SDC
Sabah Development Corridor
JTC
Jurong Town Corporation
SEC
Sabah Energy Corporation
KBD
Thousand Barrel per Day
SEZ
Special Economic Zone
LPG
Liquid Petroleum Gas
SMI
Small Medium Industry
M3/DAY
Cubic metre per day
SOGDC
Sipitang Oil Gas Development Corporation
MFO
Marin Fuel Oil
SOGIP
Sipitang Oil and Gas Industrial Park
MMSCFD
Million Standard Cubic Feet per Day
SOGT
Sabah Oil and Gas Terminal
MTPD
Metrics Ton per Day
SSGP
Sabah-Sarawak Gas Pipeline
MPRC
Malaysia Petroleum Resources Corporation
TSCF
Trillion Standard Cubic Feet

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3.0 INTRODUCTION TO SOGIP

4.0 SOGIP MASTER PLAN

5.0 INVESTMENT SCENARIO & INDUSTRIAL

6.0 LAYOUT PLANNING

8.0 INFRASTRUCTURE PLANNING

9.0 UTILITIES PLANNING

10.0 INCENTIVES & PROMOTIONS

11.0 IMPACTS & BENEFITS TO SABAH STATE

12.0 SOGIP DEVELOPMENT PLAN

13.0 SOGIP KEY SUCCESS FACTOR

SUPPORT SERVICES PLANNING

iv | SIPITANG OIL & GAS INDUSTRIAL PARK (SOGIP) MASTERPLAN

5.0 INVESTMENT SCENARIO & INDUSTRIAL ACTIVITIES PLANNING

6.0 LAYOUT PLANNING

9.0 UTILITIES PLANNING

10.0 INCENTIVES & PROMOTIONS

12.0 SOGIP DEVELOPMENT PLAN

SIPITANG OIL & GAS INDUSTRIAL PARK (SOGIP) MASTERPLAN |

| SIPITANG OIL & GAS INDUSTRIAL PARK (SOGIP) MASTERPLAN

1.0 EXECUTIVE SUMMARY

SIPITANG OIL & GAS INDUSTRIAL PARK (SOGIP) MASTERPLAN | 3

Photo Source :http://www.horizonborneo.com

| SIPITANG OIL & GAS INDUSTRIAL PARK (SOGIP) MASTERPLAN

Economic Transformation Programme Report

Petrochemicals plants to manufacture resins,

Basic infrastructure facilities, utilities and general

SIPITANG OIL & GAS INDUSTRIAL PARK (SOGIP) MASTERPLAN | 5

2.1 Sabah Natural Gas Supply Scenario

monetising these fields would be technically challenging.

Total Gas Discovered Resources in Sabah

Figure 1: Summary of Total Discovered Gas Resources in Sabah

Sabah Gas Supply Network Infrastructure and

Gayang, Tuaran and Labuan Gas Terminal 1 (LGAST-1)

| SIPITANG OIL & GAS INDUSTRIAL PARK (SOGIP) MASTERPLAN

Figure 2: Location of Demand Centres in Sabah / WP Labuan

Figure 3 : New Industries in Kimanis and Sipitang

Figure 3: New industries in Kimanis and Sipitang

Gas Supply to Kimanis and Sipitang

SIPITANG OIL & GAS INDUSTRIAL PARK (SOGIP) MASTERPLAN | 7

| SIPITANG OIL & GAS INDUSTRIAL PARK (SOGIP) MASTERPLAN

3.0 INTRODUCTION TO SOGIP

SIPITANG OIL & GAS INDUSTRIAL PARK (SOGIP) MASTERPLAN | 9

10 | SIPITANG OIL & GAS INDUSTRIAL PARK (SOGIP) MASTERPLAN

4.0 SOGIP MASTER PLAN

Since formation of SOGDC and SOGIP in 2010, the

In transforming SOGIP into the premier oil and gas

4.3.1 Jamnagar Industrial Park

This document describes SOGIP master plan which

Jamnagar, located in the state of Gujarat, has three

4.2 Terms of Reference

Through analysis of the Jamnagar Industrial Park,

Both Reliance and Essar Oil refineries transport their

Source : MPRC, Pengerang Masterplan Draft report Arthur D

SIPITANG OIL & GAS INDUSTRIAL PARK (SOGIP) MASTERPLAN | 11

3. Superior refinery product slate

4. Proximity to major crude supply

5. Dedicated infrastructure and utilities

3. Tight vertical and horizontal integration

4. Human resource development

5. Stable government and business friendly

4.3.2 Jurong Island

1. Availability of critical mass

4.3.3 Jubail Industrial City

Petrochemicals plants to manufacture resins,

5. Stable government and business friendly