Sabah on track to become regional energy hub
12 Feb 2025
Sabah is set to become a major energy hub in South-east Asia with the launch of the US$2bil (RM8.88bil) Oil and Gas, Energy Hub Project at the Sipitang Oil and Gas Industrial Park (Sogip).
Chief Minister Datuk Seri Hajiji Noor said the project would play a pivotal role in Malaysia’s energy and industrial strategy.
“Sogip will serve as a catalyst for further growth in the energy sector, which is crucial for Sabah’s sustained economic growth.
“Most importantly, this project will open up more opportunities for collaboration, innovation and development in the oil, gas and energy sector, which will benefit both the industry and local communities,” he said at the launch of the project here yesterday.
Hajiji said the Sogip development would emphasise environmental sustainability, in line with the government’s initiative towards reducing its carbon footprint and integrating cleaner energy sources such as liquefied natural gas, among others.
He said the energy storage and distribution systems within Sogip are being developed to support Malaysia’s long-term renewable energy goals.
By ensuring a steady supply of natural gas and other lower-carbon fuels, Sogip – located some 150km from here – could help bridge the transition from fossil fuel dependency to greater adoption of renewables, such as solar and wind power, in Malaysia’s energy mix, he added.
The project is a collaboration between Sabah Oil and Gas Development Corporation (SOGDC), which manages Sogip, and Gibson Shipbrokers Limited – a maritime, energy and associated industries speciality company.
To be done in two phases, it would see the construction of a state-of-the-art port to support energy transportation and trade activities, among others, utilising an 80% local workforce.
Hajiji said the successful implementation of the project would not only enhance Malaysia’s domestic economy but also support regional energy security and boost international trade.
“With strong support from both private sector partners and the government, Sogip is anticipated to attract additional investments in energy infrastructure, technological advancements and industrial expansion,” he said, adding it would also offer job opportunities, skills training and community empowerment.
“As Malaysia continues to strengthen its presence in global energy markets, Sogip will play a strategic role toward economic resilience, energy independence and sustainable industrial growth,” he said.
He reminded investors to prioritise the employment of Sabahans in all projects and operations within the state while urging industry players to comply with this fundamental requirement.
SOGDC chairman Datuk Seri Rahman Dahlan said the company had been tasked with developing the oil and gas industry in Sabah, and today, has received some Us$2bil worth of investments from countries like Singapore, the United Kingdom, the Philippines, Japan and Saudi Arabia.
“This is exciting because it will place Sabah as a forward storage hub for major Middle Eastern producers.
“So, for example, if they want to sell their oil to China, Japan or South Korea, they do not have to wait for the supply from Middle Eastern countries,” he said.
This project is scheduled to start its first phase this year.
Source: The Star
