Green Steel Project in Sabah to draw close to RM20bil in total investment


KOTA KINABALU: A Sabah-owned corporation has inked a memorandum of understanding with a steel manufacturer that promotes sustainability on Wednesday (Nov 30).

The Sabah Oil and Gas Development Corporation Sdn Bhd (SOGDC) has established a land-lease agreement with Esteel Enterprise Sabah Sdn Bhd for the Green Steel Project which is expected to have a total investment value of US$4.39bil (RM19.65bil).

According to a statement by SOGDC, the deal reflects the importance of reducing the steel industry's carbon footprint on the environment.

It said Esteel Sabah initiated the project to develop a full green industry supply chain covering iron ore concentration to high-end steel processing.

The proposed plant uses natural gas as a reducing agent instead of coke and coal, which is said to reduce carbon emission by 70%.

The statement said that in future, operations will gradually transform to green hydrogen smelting with near-zero carbon emissions.

(The steel industry is the world’s largest carbon emitter, accounting for about 8% of the world’s total emissions, according to global management consultancy McKinsey and Company.)

The statement said Esteel Sabah will build an integrated green steel plant on 180ha (446 acres) of land for Phase One of the project inside the Sabah Oil and Gas Industrial Park (Sogip), an industrial area for downstream oil and gas operations in the district of Sipitang.

The Green Steel Project will be implemented in three phases, it added.

Phase One will commence in the fourth quarter of next year and is expected to be ready by the fourth quarter of 2025.

All three phases are expected to create between 10,000 and 15,000 jobs during the construction phase while Phase One will provide 1,752 operations jobs, the statement added.

Phases Two and Three are projected to create 5,455 job opportunities when they become operational.

The signing ceremony was witnessed by Chief Minister Datuk Seri Hajiji Noor while SOGDC was represented by its chairman Datuk Seri Abdul Rahman Dahlan and managing director/chief executive officer Datuk Harun Ismail.

Esteel Sabah was represented by its managing director Xu Yihang and director Eng Shao Wei.

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