Malaysian hands out key awards for $7bn oil link to North Asia
Malaysia's Trans-Peninsula Petroleum (TPP) has signed agreements with domestic, Saudi Arabian and Indonesian companies for its planned $7 billion pipeline project to deliver oil to North Asia, bypassing the Malacca Strait.
Ranhill Engineers&Constructors of Malaysia and Indonesia's Tripatra entered into a master's alliance agreement for the design, engineering, procurement, construction and testing of the 312-kilometre pipeline.
Ranhill will carry out engineering, procurement and construction while Tripatra has been assigned the task of engineering design and project management consultancy. The contractors and project operator TPP will share all risks associated with the project.
TPP also signed memoranda of understanding with Indonesia's Bakrie&Brothers to supply the pipe and with Saudi Arabia's Al-Banader International to provide the oil. The crude will come from Middle East and African producers.
Construction work on the phased project could begin as early as next year after land acquisition and the necessary regulatory approvals.
The initial phase of the project will have 2 million barrels per day of throughput capacity.
There are plans for it to come into operation in four years' time at an expected cost of about $2 billion.
"When the entire project is completed in 2014, the pipeline will divert about 20% of oil transiting through the Strait of Malacca, proportionately easing congestion in the straits," said TPP.
The pipeline, which will run from Kedah to Kelantan in northern Malaysia, will form part of a $14 billion-plus project that will also see oil refineries built on the peninsular Malaysia coastline.
By Amanda Battersby
© Upstream 2007
