Refinery may be linked to Yan-Songkhla pipeline

By Kamarul Yunus BT
Published: 2009/07/28
MERAPOH Resources Corp Sdn Bhd says its refinery in Kedah may be linked to a pipeline that will run from Yan in the state to Songkhla in Thailand, an idea that's being floated by its Chinese backers."The Chinese have proposed the idea of the pipeline connecting Yan and Songkhla. They (the Chinese) have already conducted a study and spoken to China, Thailand and Malaysia about it," Merapoh executive chairman Md Nazri Ramli told Business Times in an interview.Chinese investors are also keen to fund the pipeline's construction which will cut across the peninsula, he said.

This means that there are now about three separate proposals to build such a pipeline, which has been touted as a faster way to transport crude oil or its refined products from the Middle East to the Far East.

Prior to this, an oil pipeline running from Kota Perdana in Bukit Kayu Hitam to Songkhla has been proposed by SKS Development, a company owned by businessman Tan Sri Syed Mokhtar Al-Bukhary.SKS has also proposed to build its own refinery.This proposal was brought up during a meeting between Prime Minister Datuk Seri Najib Razak and his Thailand counterpart Abhisit Vejjajiva during the latter's official visit to Malaysia last month.

There is also another US$7 billion (RM24.6 billion) oil pipeline project known as the Trans-Peninsular Pipe-line, connecting Yan to Bachok in Kelantan. How-ever, its progress is unclear.

Md Nazri is confident that this Yan-Songkhla pipeline would become a reality as the Chinese will do anything to meet its energy demand."It is projected that China needs 3 million barrels of oil per day (bpd) by 2015 from the current consumption of 7 million bpd. Currently, their disparity of energy consumption against its population is very low compared to the US, which consumes about 24 million bpd," he said.Merapoh chose Yan because it will create another petroleum hub for the country."Yan will be the first entry point for crude oil from the Middle East. Yan is not a busy route, and a wide span, which is easy for vessels to manouvre. It is a good point to catch the crude and go back," he said.

Apart from the pipeline, he said the Chinese investors are also looking at transporting the refined petroleum products using the Singapore-Kunming Rail Link."This is another mode of transportation that will cut short transporting time to China. It would just take about 72 hours to transport the products using this rail services to China."All these developments of turning Malaysia, especially the northern states, as the petroleum hub of the region are the vision of our former prime minister Tun Dr Mahathir Mohamad," he said.