MAY 13, 2010

Boom Times for Sleepy Kimanis
Kimanis town: The only row of wooden shop houses will make way for new ones.

Billions of ringgit of oil and gas projects are turning a fishermen’s enclave into a prosperous oil town

Boom Times for Sleepy Kimanis Laili Japar: Food from the sea.

Laili Japar and Lilian Thien don’t know how old it is. "Surely it is older than me," says Ms Laili, 50. "I was born here." Like most of the 10,000 fishing villagers, they know that the only row of six rickety two-storey wooden shop houses is what makes Kimanis town. "It will collapse one day," says Ms Thien, 56, who runs a grocery in one of them. "The wooden pillars are broken. No one lives upstairs. Yes, it’s dangerous. But we can still use the ground floor for business."

Boom Times for Sleepy Kimanis Musa Aman: Gas impetus.

So Ms Thien and the others are happy at the news that chief minister Musa Aman is transforming Kimanis, about 60 km from Kota Kinabalu on Sabah’s west coast, into a booming oil town.

"It would be nice if this building can be replaced by a modern concrete one," says Ms Thien who has about 30 customers a day. They buy mostly milk, sugar and salt from her. There is one other grocer next to her. A coffee shop occupies a corner shop. The rest are closed. It is noon on a Saturday. But there are less than 20 people in town.

At the first Borneo International oil and Gas Conference and Exhibition in Kota Kinabalu on May 7, Mr Musa spoke of bold plans that will cost many billions of ringgit to turn Kimanis into an industrial and commercial hub for the oil and gas industry.

The impetus for these is a 5.5 billion-ringgit ($1.7-billion) gas pipeline that will pipe a daily one billion cubic feet of natural gas off the western shores of the east Malaysian state to the Sabah Oil and Gas Terminal (SOGT) in Kimanis.

Boom Times for Sleepy Kimanis Lilian Thien: Hoping for a new shop house.

The gas will be used to fire a one billion-ringgit power station that will produce 300 megawatts of electricity to light up homes and run industries. Some of it will go to a small liquefied natural gas plant (LNG), some to a liquefied petroleum gas (LPG) factory to produce cooking gas and, if there is any left, it will flow through the 500-km pipeline to an LNG plant at Bintulu in neighbouring Sarawak.

The pipeline, on a 104-hectare (250-acre) site, will be ready by December and the first gas is expected at Kimanis in three years. The SOGT will be able to store 300,000 barrels of crude oil a day. Sabah’s oil production averages 200,000 bpd.

There is plenty of oil and gas to fuel Sabah’s petrochemical industries. The north Borneo island state has about 11 trillion cubic feet of gas and 1.5 billion barrels of oil in reserves. Sabah exported almost 14 billion ringgit of crude oil last year which formed almost 40% of all of the state’s exports. But oil and gas make up slightly less than one-tenth of Sabah’s GDP.

Thus Mr Musa has a bigger vision for Sabah’s oil and gas industry. There are plans for an oil refinery at Kimanis, and more industries on an 830-hectare site at Sipitang, about 50 km south of Kimanis, which will have a plant making urea.

There will be new townships of houses, shops and commercial complexes, banks, hotels, restaurants, clinics, training schools to produce skilled engineering workers, a flying school to train pilots, a deepwater port and an airport with hangers for helicopters to fly workers to oil rigs.

All these however will take 20 or 30 years to build before Kimanis can rival oil towns of Kerteh in the peninsular Trengganu state, Miri and Bintulu in Sarawak. Bintulu, which houses the world’s largest LNG plant, is building a 1.5-billion ringgit township as it continues to boom on the back of its gas industries that started more than 30 years ago.

"It will start small but the Kimanis township will be modern and well planned with a green environment," Mr Musa says.

Boom Times for Sleepy Kimanis Pipes at Sabah Gas and Oil Terminal in Kimanis: Boom years ahead for oil and gas industries.

Mr Musa is a practical man and not one who seeks unneeded publicity. This has unfortunately unnerved some of his cabinet colleagues who have been anxious to see greater development of the oil and gas industry in their state.

But Mr Musa has been in quiet discussion with Petronas, the national oil company, since 2006 to work out a master plan for Sabah’s downstream gas industries. Petronas has since become the largest investor in Kimanis, spending billions of ringgit on the pipeline, the power station and the SOGT.

"The fact that we have not publicised all these initiatives does not mean that we are not doing anything," he said at the signing of a memorandum of understanding between the Sabah Foundation and Petronas to build the 300MW power plant two years ago.

"All announcements on government plans will be done at an appropriate time when key aspects of the projects have been finalised and can be implemented. We do not want to make announcements for political mileage or vested interests."

But what is sure is that boom times have come to Kimanis. Steel fabrication yards, factories and shops to supply wares, workshops, warehouses, clinics, banks, restaurants and all kinds of industrial and commercial undertakings will spring up very soon.

The whirr of helicopters transporting workers to oil rigs will punctuate the quiet of Kimanis. And Laili Japar and Lilian Thien will be happy to see new rows of modern shop houses replacing the one they know all too well. – Insight Sabah

– Reported by Jenney Juanis; Pictures by Henry Matakim