October 9, 2011

PETRONAS Chemicals Awarded USD1.5 billion Sabah Ammonia-Urea project

KOTA KINABALU: Petronas Chemicals Group Berhad (PCG) yesterday announced that its wholly-owned subsidiary, Petronas Chemicals Fertilizer Sabah Sdn Bhd has awarded the Basic and Detailed Engineering, Procurement, Construction and Commissioning (BEPCC) Alliance contract for its USD1.5 billion Sabah Ammonia-Urea (SAMUR) project in Sipitang to a consortium of contractors.

The consortium comprises Mistsibishi Heavy Industries Ltd, Apex Energy Sdn Bhd and Pt Rekayasa Industri.

PCG chairman and Petronas EVP of Downstream Business Datuk Wan Zulkiflee Wan Ariffin, in his welcoming address at the Memorandum of Understanding (MoU) signing ceremony here yesterday, said the decision to award the BEPCC Alliance contract for Samur to the consortium was made after heavy scrutiny and deliberation through an open tender.

The parties were subjected to stringent evaluation to ensure the most technically qualified and commercially competitive bid for the BEPCC Alliance, he said before the signing ceremony and handing-over the appointment letter to the consortium’s associate in Sabah, Sabah Energy Corporation (SEC) which was witnessed by Chief Minister Datuk Seri Musa Aman.

According to Wan Zulkiflee, one of the major criteria was for the Samur project’s need for technical expertise and access to cutting edge technology as it is the key element to ensure that the Sabah fertilizer plant will be competitive in the global environment.

“Under the contract, the Samur project will be carried out on a partnership basis between the project owner and the consortium, focusing on aligned objective to deliver the best fit-for-purpose project quality in the most effective manner within the allocated time.

“Equitable risk and reward sharing through price adjustment mechanism will also be adopted. Essentially, the project owner and contractors are to share the gain on cost saving and the penalty of overrun against target cost,” he disclosed.

He added that moving forward, there would be greater participation among Sabah companies in the Samur project through the consortium’s appointment of SEC as its associate.

Contract opportunities specifically for Sabahan companies include works related to the building of the administration complex, earthworks, civil engineering, building, roads, inland transportation, security and manpower supply among others.

In this regard, Petronas, he said, has been working closely with the State Government to identify technically qualified and financially capable Sabah companies to undertake such scope of works. He pointed out that the Samur project is expected to generate greater employment and business opportunities in Sabah during the construction and post construction stages.

“In terms of employment, PCG has actively taken steps to employ Sabahans for the Samur project and they have been assigned for intensive training at PCG’s various petrochemical plants including Asean Bintulu Fertilizer Sdn Bhd, Petronas Ammonia Sdn Bhd, Petroans Fertilizer Kedah Sdn Bhd and Petronas Methanol (Labuan) Sdn Bhd,” Wan Zulkiflee said.

Acting as a catalyst for the growth of Sabah’s petrochemical industry, the Samur project will also spur the growth of supporting industries such as infrastructure development, logistics, housing, hotel, healthcare and education among others.

“I am confident that in time, Sipitang would be transformed into a place bustling with economic activities which will contribute to the continued growth and development of the Sabah’s economy,” he stressed. - Borneo Post

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