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Friday, 05 December, 2008, 17:10 GMT | more >>

Partners give boost to Malaysian pipeline



By Upstream staff 

Malaysia's ambitious plan to build a $7 billion trans-national oil pipeline to ship Middle East crude to big Asian importers moved a step closer to reality today after several regional firms signed on as partners.

Project developer Trans-Peninsula Petroleum signed a master alliance with Malaysian engineer Ranhill and Indonesia's Tripatra, a unit of integrated energy group Indika Inti Energi.

At a ceremony in Kuala Lumpur, it also signed up Saudi Arabia's Al-Banader International Group and Indonesian steel pipe maker conglomerate Bakrie & Brothers.

The 310 kilometre pipeline aims to cut time and costs by bypassing the crowded Malacca Strait, but observers have been sceptical as similar ventures for a Southeast Asian shipping short-cut over the past few decades have failed to materialise.

"We would not be here today, we would not have the support of the Saudi partners, if this project was not feasible or this project cannot be financed," Trans-Peninsula Petroleum chairman Rahim Kamil Sulaiman told reporters after the signing.

He said the project aimed to divert about a third of the Middle Eastern crude that currently sailed through the Malacca Strait and around Singapore into the South China Sea.

"We are not going to displace the 12 million barrels of oil that pass the Straits of Malacca. We are going only for about 30% of the volume that goes through the Strait of Malacca, to ease the congestion in the strait," Rahim said.

Trans-Peninsula Petroleum planned to build the pipeline over eight years from 2008.

The first phase, costing $2.3 billion, could transport 2 million barrels of oil per day.

After the final, third phase, capacity would reach 6 million bpd.

Ranhill would undertake the main construction work while Bakrie would supply steel pipes.

Al-Banader would help secure oil supplies from the Middle East and inject capital. Tripatra would manage the project, according to Reuters.


Monday, 28 May, 2007, 07:40 GMT  | last updated: Monday, 28 May, 2007, 07:48 GMT

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