Proposed $14 billion oil pipeline across Malaysia could cut costs
A proposed oil pipeline project to pump oil across northern Malaysia bypassing the Malacca Strait could lower transportation costs and avoid risks of pirate attacks on tankers, Deputy Prime Minister Najib Razak said Tuesday.
The proposed 50 billion ringgit ($14.2 billion) project would involve building a 320-kilometer pipeline across northern Malaysia, linking ports on the two coasts, officials in northern Kedah state announced last week. The plans, which have yet to be finalized, also call for at least one coastal refinery that could process 200,000 barrels daily scheduled to be operational by the end of 2010.
Crude oil would be refined in Kedah, pumped through the pipe to Kelantan on the east coast and then loaded onto tankers bound for Japan, China and South Korea, completely bypassing Singapore and the Malacca Strait. "There are proposals to have a refinery and a pipeline that will take it across. As far as I know, it is still at a discussion stage. Nothing has been finalized," Najib said. "It's primarily for commercial purposes because they think they can transport the oil at a lower cost and also avoid some of the risks relating to heavy traffic at the Straits of Malacca."