LABUAN: The private sector is projected to invest around RM2.4 billion in Labuan, particularly in the oil and gas sector over the next few years, while creating more than 3,000 jobs on the island, said Deputy Prime Minister Tan Sri Muhyiddin Yassin.
He said this was part of the government's Economic Transformation Programme (ETP) to galvanise Labuan's economy.
Muhyiddin said under the ETP, the Labuan Oil and Gas Master Plan is to be jointly undertaken by Malaysia Petroleum Resources Corporation (MPRC), Labuan Corporation and industry players.
"I am made to understand that subsequent to the master plan's recommendations, Asian Supply Base plans to develop a new RM250 million jetty as part of its business expansion plan. "The government also welcomes plans from Labuan Shipyard and Engineering to expand facilities which requires an investment of RM263 million while creating further jobs for the local community.
"All in all, we envisage that the private sector will invest around RM2.4 billion in Labuan alone over the next few years," he said in his speech when opening the Asean Oil and Gas Expo 2012, here today.
Muhyiddin also underlined the significance of the oil, gas and energy (OGE) sector's contribution to the country's Gross Domestic Product (GDP).
For just the first half of this year, the OGE sector contributed about 18.4 per cent or RM82.8 billion to the country's GDP, he said.
He said given the rise in global energy demand and economic growth, the contribution from the oil and gas industry (excluding energy), is expected to reach RM81.9 billion or 11.1 per cent of Malaysia's enlarged GDP in 2015.
"Upstream activities are expected to contribute RM43.0 billion or 5.8 per cent to the GDP in 2015 and downstream activities, RM39.8 billion or 5.3 per cent," he added.
He said the oil and gas industry had been identified as one of the 12 New Key Economic Areas (NKEAs) to help drive Malaysia's transformation into a high income nation. In this respect, Muhyiddin said Sabah had shown strong potential in the upstream oil and gas deepwater business.
Citing the Kikeh deepwater field, he said the country's first deepwater offshore development had started the ball rolling in 2008, and since then deepwater discoveries in Gumusut/Kakap, Malikai, Jangas, Ubah Crest, Pisangan and Kamunsu fields off Sabah shores, are currently being developed.
On midstream and downstream opportunities, Muhyiddin said petroleum consumption in Asia is expected to grow by at least an additional 1.8 million barrels per day by 2020. "This increase of hydrocarbons will require additional storage capacity at a time when the existing trading hub, Singapore, is nearing full utilisation and facing expansion constraint," he added.
Muhyiddin said with Johor's ports located on major shipping routes, deep water marine accessibility, the close proximity to Singapore and abundant space, Malaysia is well placed to tap regional midstream logistics markets of oil and oil product storage.
He said Tanjung Bin and Tanjung Langsat had already attracted several global petroleum trading companies such as Vitol, Trafigura, Royal Vopak, MISC and Dialog to undertake the storage and trading business out of Johor.
He said Johor is on track to complement Singapore and could replicate a midstream oil and gas hub similar to Amsterdam-Rotterdam-Antwerp.
"These private sector investments are in addition to the proposed RM60 billion Project Refinery and Petrochemical Integrated Development (RAPID) in Pengerang, Johor.
"Collectively, these developments are expected to be the major impetus in transforming Southern Johor into the new midstream to downstream oil, gas and petrochemicals hub in Malaysia," he said.