Sabah’s RM20 billion green technology leap
Published on: Wednesday, January 10, 2024
By: Larry Ralon
Hajiji witnessing Adzmir (left) handing over the documents to Xu (right).
Kota Kinabalu: Chief Minister Datuk Seri Hajiji Noor said Sabah is geared towards fully adopting green technology with the RM20 billion green steel project at the Sipitang Oil and Gas Industrial Park (Sogip).
Hajiji earlier witnessed the Heads of Agreement (HOA) handing over ceremony from Sabah Energy Corporation Sdn Bhd (SEC) to Esteel Enterprise Sabah Sdn Bhd (Esteel Sabah) for the supply of 150 million standard cubic feet per day (mmscfd) of natural gas at Menara Kinabalu, Tuesday.
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He said the State Government welcomed investments in products that harness renewable energy, improve waste management and promote sustainable solutions.
“Investing in green technology-based products not only aligns with global sustainability goals but also taps into a rapidly growing market for eco-friendly solutions,” he said.
Hajiji reiterated the point he raised at the Global Chinese Economic and Technology Summit (GCET) in Shenzen, China, last November, that Sabah has identified a few key industry areas that not only promise substantial returns on investment but also contribute to a more sustainable and prosperous future.
“This marked Sabah’s confidence in the green steel project, which is among investments that represented the foundation of the State’s economic growth and development strategy,“ he said.
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Under the HOA, SEC would supply 100 million standard cubic feet per day (mmscfd) of natural gas to Esteel Sabah’s steel manufacturing plant and an additional 50 mmscfd for the plant’s power generation over the next 20 years.
He added that SEC’s significant contribution to this project highlights its crucial role in promoting sustainable initiatives and fostering regional development.
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The green steel project is a three-phase project which opted for natural gas as a reducing agent instead of coke and coal, reducing carbon emissions by 70 per cent and making it low carbon, efficient and environmentally friendly.
Esteel Enterprise Sabah, a subsidiary of Singapore’s Green Esteel Pte Ltd, signed the land-lease agreement with the Sabah Oil and Gas Development Corporation Sdn Bhd (SOGDC) to set up the manufacturing plant at Sogip in Sipitang in November 2022.
Phase One of the project, with an estimated cost of USD1.93 billion, is expected to commence this year and be completed by 2026.
This project is anticipated to create approximately 2,795 jobs during its operational phase.
Representing SEC at the HOA handover ceremony was Chief Executive Officer Datuk Adzmir Abd Rahman, while Managing Director Xu Yihang represented Esteel Sabah.
Also present were State Industrial Development and Entrepreneurship Minister Datuk Phoong Jin Zhe, SEC Chairman Datuk Annuar Ayub, State Secretary Datuk Seri Sr Safar Untong, and SOGDC Chief Executive Officer Datuk Harun Ismail.
Annuar in his address said SEC and Esteel have embarked on a journey that promises to redefine the industrial landscape of this region.
He said the green steel project by Esteel Sabah promises to bring forth a revolution in steel production – one rooted in environmental kindness and innovative growth.
“SEC’s venture into this project signifies our commitment to supporting eco-friendly practices and technological advancement.
“This ceremony is not just a mere formality but a commitment and a promise to our community and environment. Furthermore, this project will not only elevate Sabah’s status on the world stage but transform the lives of thousands by creating job opportunities in both the construction and operational phases, as well as economic spin-off,” he said.
Annuar said as SEC pledges 100 mmscfd of natural gas for Esteel Sabah and another 50 million mmscfd for power generation to Esteel Sabah over the next two decades, SEC is doing more than fulfilling their ambitious endeavour as SEC is also inspiring the desire for sustainable development for the future generation.
Phoong when met by reporters later said the HOA handing over also answered those assemblymen who have been asking about the Esteel Sabah investment during the State Legislative Assembly (DUN) sittings whether it is still on.
He said it (Esteel Sabah) is one of the biggest investments to enter Sabah so definitely there are a lot of challenges, including on the gas supply which was resolved through the HOA.
“There are still several other criteria that they need to fulfil. But I believe we will be able to resolve the arising issues this year,” he said while assuring that the Esteel Sabah investment would bear fruit and thus boost the State industrialisation sector.
He said the construction of the Esteel Sabah manufacturing plant and other facilities like jetty will also start very soon, as Esteel has already obtained approval from the Sipitang District Council.
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