Sarawak firm’s gas contract bid sparks discontent in Sabah

The sleepy hamlet of Kimanis, about 50km from Sabah state capital Kota Kinabalu, could provide an unlikely backdrop for a battle which could cost the Barisan Nasional (BN) federal government votes which it needs to stay in power.

The Malaysian Insider understands that widespread speculation is that Naim Cendera Sdn Bhd — a unit of a company owned by Tan Sri Taib Mahmud’s Sarawak administration — is leading the race for a lucrative contract worth more than RM1 billion to build the Sabah Oil and Gas Terminal (SOGT) and other related projects and this is breeding discontent among local politicians and businesses.

Petronas Carigali, a subsidiary of the national oil company controlled by the federal government, is set to award the project soon.

But it is understood that Naim Cendera has already been sending out feelers to local sub-contractors that it has already clinched the deal.

Local Umno warlords are unhappy about the speculation.

“If it is true then it is ridiculous because Sabah companies will end up getting just the crumbs from the project.

“Why is a Sarawak company being given everything?” a senior Sabah Umno leader told The Malaysian Insider.

It is understood that a Sabah joint venture has struck up a partnership with a China oil company to make a bid for the project.

Sources said the Sabah-China bid is at least US$50 million lower than that of the Naim Cendera proposal.

Petronas has not yet responded so far to a request for comment.

The national oil company had invited bids this year after a three year hiatus for SOGT’s engineering, procurement, construction and commissioning project.

The earlier invitation for bids in 2007 was pulled back due to “technical reasons.”

It is understood that the Kimanis MP Datuk Anifah Aman, who is Foreign Minister and a key member of the Najib Cabinet, could face political pressure if the project is awarded to Naim Cendera.

Anifah did not comment on the issue but other Sabah politicians The Malaysian Insiderspoke to say Umno in Sabah would be hard pressed to answer criticisms if a locally led consortium does not get the lion’s share of the deal.

The fine balance of BN’s hold on Putrajaya is currently still secured through the backing of MPs in Sabah and also Sarawak.

Anifah had emerged in 2008 as the fulcrum of a movement within BN, from which Sabah and also Sarawak hoped to get some reward for the strong support the ruling coalition needs to stay in power.

The SOGT in Kimanis is being developed by Petronas as part of its Sabah-Sarawak integrated oil and gas project.

Besides the SOGT, a 500km Sabah-Sarawak gas pipeline is also being constructed from the SOGT in Kimanis to Bintulu.

The construction of the pipeline has already created some controversy with state opposition leaders objecting on grounds that Sabah’s wealth was being siphoned off to Sarawak.

The north Borneo island state has about 11 trillion cubic feet of gas and 1.5 billion barrels of oil in reserves.

It exported almost RM14 billion of crude oil last year which formed almost 40 per cent of all of the state’s exports. But oil and gas make up slightly less than one-tenth of Sabah’s GDP.

courtesy of Malaysian Insider