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Proposed oil pipeline across northern Malaysia approved, says prime minister

Proposed oil pipeline across northern Malaysia approved, says prime minister

The Malaysian government has approved building an oil pipeline across the breadth of the country, a project that could help tankers avoid sailing through the busy Malacca Strait, Prime Minister Abdullah Ahmad Badawi said Monday.
The proposed 50 billion ringgit (US$14.2 billion; euro10.4 billion) project involves building a 320-kilometer (200-mile) pipeline from Kedah state on the northwestern coast to Kelantan state in the northeast, officials have said.
"Yes, we have agreed to it," Abdullah, who is also finance minister, told reporters.
The project will help accelerate economic development in the north and east of peninsular Malaysia, he said, adding that other details would be announced later.
The plans call for at least one coastal refinery that could process 200,000 barrels daily scheduled to be operational by the end of 2010, Kedah officials said last month.
Crude oil would be refined in Kedah, pumped through the pipe to Kelantan and then loaded onto tankers bound for Japan, China and South Korea, completely bypassing Singapore and the Malacca Strait.
Investors from China, Iran and Saudi Arabia are expected to take a stake in the project, which will allow Middle East oil shipments to reach the South China Sea without traveling through the Malacca Strait, which lies off peninsular Malaysia's west coast, officials have said.
The strait, which carries half the world's oil and more than a third of its commerce, is shared by Malaysia, Indonesia and Singapore. It is notorious for robberies and kidnappings by pirates, but attacks have fallen following increased security patrols in 2005.
Malaysian firms Merapoh Resources Corp. and SKS Ventures will build the refineries, while Trans-Peninsula Petroleum will construct the pipeline, according to Kedah officials.
SKS Ventures already has links with the Middle East oil industry. The company recently signed a US$16 billion (euro12 billion) deal with Iran to develop two gas fields in southern Iran.


Updated : 2021-10-20 22:31 GMT+08:00