Petroliam Nasional Bhd (Petronas) is undertaking a feasibility study for the development of an energy supply and related infrastructure in the Terengganu Silica Valley in Marang.
President/Chief Executive Officer Tan Sri Wan Zulkiflee Wan Ariffin said the study, conducted together with state-owned company Terengganu Inc, would involve technical and commercial assessment to develop natural gas supply, power generation, supply of industrial gases and other related gas supply in the Silica Valley.
“We expect to complete the study within 18 months,” he told reporters after witnessing the signing of a Memorandum of Understanding (MoU) between Petronas and Terengganu Inc here today.
The MoU was signed by Petronas Malaysia Petroleum Management Vice-President Muhammad Zamri Jusoh and Terengganu Inc Director Datuk A Rahman Yahya.
Terengganu Menteri Besar Dr Ahmad Shamsuri Mokhtar, who witnessed the ceremony, said the MoU also included a proposal to develop 32 kilometres of gas transmission and distribution pipeline to the project to allow supply of gas through the peninsular gas utilisation network from existing gas supply systems.
He said the Silica Valley development would be partly funded by the State government, but declined to disclose the amount, saying that the proposal was still at the preliminary stage.
With a gross development value of RM13 billion, the Silica Valley will be developed in two phases — 470 hectares (ha) in the first phase and 3,520 ha in the second phase.
The project is scheduled for completion within 10 to 15 years and create 7,200 jobs.
On the outcome of the Organisation of the Petroleum Exporting Countries’ (OPEC) meeting today, Wan Zulkiflee said Petronas’ plans were based on the continuance of the production cut.
“In the past, we have been complying with this 20,000 barrels production cut per day and we just have to see on the outcome of this meeting,” he said.
The OPEC meeting is scheduled to be held in Vienna today with the aim of reaching an accord over production levels for the next six months.
The cartel will then meet with allied non-OPEC partners tomorrow, with markets widely-expecting the energy alliance to announce steep output reductions of around 1.2 million to 1.4 million barrels per day starting January.
Petronas had previously reduced its oil production by 20,000 barrels per day in line with efforts by OPEC and its allies to solve the global supply glut.