The Sabah Energy Corporation in Malaysia will supply 100 million standard cubic feet per day of natural gas to Esteel Sabah’s green steel manufacturing plant.
Sabah is on its way to fully adopting green technology with an US$4.3bn (RM20bn) green steel project at the Sipitang Oil and Gas Industrial Park (SOGIP), one of Maylasia’s targeted investment areas..
Sabah Chief Minister Datuk Seri Hajiji Noor said the state welcomes investments in products that harness renewable energy, improve waste management, and promote sustainable solutions.
“Investing in green technology-based products not only aligns with global sustainability goals but also taps into a rapidly growing market for eco-friendly solutions,” he said.
Sabah is a state of Malaysia located on the northern portion of Borneo, in the region of East Malaysia. The Malay government said Sabah is expecting a boom in its oil and gas industry in the coming years.
He expects the industry to expand at a rapid pace following the state government’s recent cooperation with Petronas through the signing of a heads of agreement (HoA) which allows Sabah’s SMJ Sdn Bhd to acquire a 50% participation interest in the Samarang Sharing Contract (PSC).
The Samarang PSC is a producing asset encompassing key oil and gas hubs in Sabah and currently produces around 36,000 barrels of oil equivalent per day for both oil and gas, in which the gas is delivered to customers in Kota Kinabalu and Labuan.
Hajiji said this after witnessing the Heads of Agreement handing over ceremony from Sabah Energy Corporation Sdn Bhd (SEC) to Esteel Enterprise Sabah Sdn Bhd (Esteel Sabah) for the supply of 150 million standard cubic feet per day (mmscfd) of natural gas at Menara Kinabalu today (January 9).
Under the agreement, SEC will supply 100 million standard cubic feet per day (mmscfd) of natural gas to Esteel Sabah’s steel manufacturing plant and an additional 50 mmscfd for the plant’s power generation over the next 20 years.
He said the project was part of the few key industry areas identified that not only promise substantial returns on investment, but also contribute to a more sustainable and prosperous future.
The green steel project is a three-phase project that opts for natural gas as a reducing agent instead of coke and coal, reducing carbon emissions by 70 per cent and making it low carbon, efficient, and environmentally friendly.
Esteel Enterprise Sabah Sdn Bhd, a subsidiary of Singapore’s Green Esteel Pte Ltd, had signed the land-lease agreement with the Sabah Oil and Gas Development Corporation Sdn Bhd (SOGDC) to set up the manufacturing plant at SOGIP in Sipitang in November 2022.
Phase One of the project, with an estimated cost of US$1.93 billion (RM8.97 billion), is expected to commence this year and be completed by 2026.
This project is anticipated to create approximately 2,795 job opportunities during its operational phase.
Representing SEC at the Heads of Agreement handover ceremony was its chief executive officer Datuk Adzmir Abd Rahman, while Esteel Sabah was represented by managing director Xu Yihang.
About SEC
Sabah Energy Corporation Sdn Bhd, is a state government-linked company, established to lead the development of energy resources in Sabah. Our mission is to stimulate growth and innovation in the energy sector and actively participating in various industrial and commercial initiatives through our group of companies. Our core purpose centered on driving progress, nurturing growth, and creating a conducive setting for development across diverse sectors.
