Kota Kinabalu: Parti Solidariti Tanah Airku (Star) President Datuk Seri Dr Jeffrey G Kitingan called for any proposed oil refinery serving Borneo and the North Asian market to be built in Sabah, not Labuan.
Welcoming former Chief Minister Tan Sri Harris Mohd Salleh’s suggestion for a refinery, Jeffrey said the strategic rationale was sound, noting that Sabah and Sarawak produce more than 60 per cent of Malaysia’s oil and gas.
He said recent global conflicts, including tensions involving Iran, had highlighted the risks of processing resources far from their source, strengthening the case for developing refining capacity closer to production areas.
However, Jeffrey disagreed with the proposal to locate the refinery in Labuan, pointing out that the island is a Federal Territory.
“A refinery built in Labuan would be a federal asset, not one owned by Sabah. While Sabah would continue to supply the crude and gas, the added value and profits would go to the Federal Government,” he said.
Jeffrey said this reflects the current situation, citing the Bintulu pipeline and the Pengerang petrochemical complex, where raw resources are processed outside Sabah and sold at International market prices.
He said Sabah receives only five per cent royalty based on the raw value of its resources, while having to purchase refined products at market rates.
He also noted that the gas pipeline to Bintulu is being decommissioned, which could leave Sabah’s gas resources without a clear processing destination.
He stressed that both oil refining and gas processing facilities should be built in Sabah, and be owned and operated by Sabahans.
“We must process our resources in Sabah so that the value remains where the resources originate,” he said.
