KUALA LUMPUR: Tycoon Tan Sri Syed Mokhtar Al-Bukary’s consortium developing a RM7.7 billion oil refinery in Kedah are now looking to set up in the Kerpan shrimp farm, putting out some 200 farmers who are finally making money from the 15-year-old venture once partly owned by the Bin Laden family.
SKS Development Sdn Bhd, a private company linked to the tycoon, is spearheading efforts to buy the 400-ha shrimp farm now jointly owned by the Kedah state government and the Finance Ministry.
It had previously eyed paddy land in Yan and Jerlun but the state government has refused to develop those lands, citing the need to preserve paddy growing areas.
It is learnt that the state government, which can earn up to RM200 milllion annually from the oil refinery through a five per cent royalty, is also looking to monetise its land assets in view of the looming economic downturn already buffeting the world.
“It’s a no brainer. Billions in investment and mllions in annual revenues for the state against some profits for the farmers,” a state government source told The Malaysian Insider here today.
The Kerpan farm is now managed by Blue Archipelago Berhad, a wholly-owned unit of government asset manager Khazanah Nasional Berhad. It took over management of the farm in January 2008 and will invest up to RM50 million in capital and operational expenses.
The 216 farmers there have now produced 500 tonnes of shrimps that has generated some RM7.5 million in revenue. Blue Archipelago expects to triple output and also set up manufacturing facilities to add value to the shrimps that can provide up to RM40 million in annual revenues.
But executives from the consortium met with state government and Finance Ministry officials last week to lobby for the land, which they claim is ideal for the refinery.
Apart from the refinery, the consortium together with their Iranian partners want to build a trans-peninsula oil pipeline to transport the refined crude to the east coast for tankers bound for China.
China has expressed interest in the Iranian crude for energy security purposes when world crude prices spiked to US$147 (RM543.9 million) a barrel in June. Oil prices are now below US$40 a barrel but the project developers say the Kedah refinery is still viable.
Sources said the state government and Finance Ministry officials did not dismiss selling the land to the consortium but Blue Archipelago apparently has a 30 year management contract and first refusal rights.
Another concern is the environment as the Kerpan farm, which is the third largest in the country and now known as Ayer Hitam farm, is close to the Pulau Payar marine park off Langkawi.
“It all depends on the Finance Ministry now whether to go for a mega project or stick to the plan to develop agriculture and take care of the environment,” said an industry official familiar with the discussions.
Apart from SKS Development, the other consortium partners are Merapoh Resources Corporation Sdn Bhd, Hijaz Refinery Sdn Bhd, Trans Peninsula Petroleum Sdn Bhd, Pristine (M) Sdn Bhd, and Capital (M) Bhd.
Merapoh and Hijaz are involved in reclamation works to house their respective oil refinery plants for the entire project valued at RM50 billion including the pipeline to be built by Trans Peninsula. SKS had earlier proposed to build an inland oil storage facility in Kuala Jerlun.
The Malaysian Insider
24/12/08
SKS Development Sdn Bhd, a private company linked to the tycoon, is spearheading efforts to buy the 400-ha shrimp farm now jointly owned by the Kedah state government and the Finance Ministry.
It had previously eyed paddy land in Yan and Jerlun but the state government has refused to develop those lands, citing the need to preserve paddy growing areas.
It is learnt that the state government, which can earn up to RM200 milllion annually from the oil refinery through a five per cent royalty, is also looking to monetise its land assets in view of the looming economic downturn already buffeting the world.
“It’s a no brainer. Billions in investment and mllions in annual revenues for the state against some profits for the farmers,” a state government source told The Malaysian Insider here today.
The Kerpan farm is now managed by Blue Archipelago Berhad, a wholly-owned unit of government asset manager Khazanah Nasional Berhad. It took over management of the farm in January 2008 and will invest up to RM50 million in capital and operational expenses.
The 216 farmers there have now produced 500 tonnes of shrimps that has generated some RM7.5 million in revenue. Blue Archipelago expects to triple output and also set up manufacturing facilities to add value to the shrimps that can provide up to RM40 million in annual revenues.
But executives from the consortium met with state government and Finance Ministry officials last week to lobby for the land, which they claim is ideal for the refinery.
Apart from the refinery, the consortium together with their Iranian partners want to build a trans-peninsula oil pipeline to transport the refined crude to the east coast for tankers bound for China.
China has expressed interest in the Iranian crude for energy security purposes when world crude prices spiked to US$147 (RM543.9 million) a barrel in June. Oil prices are now below US$40 a barrel but the project developers say the Kedah refinery is still viable.
Sources said the state government and Finance Ministry officials did not dismiss selling the land to the consortium but Blue Archipelago apparently has a 30 year management contract and first refusal rights.
Another concern is the environment as the Kerpan farm, which is the third largest in the country and now known as Ayer Hitam farm, is close to the Pulau Payar marine park off Langkawi.
“It all depends on the Finance Ministry now whether to go for a mega project or stick to the plan to develop agriculture and take care of the environment,” said an industry official familiar with the discussions.
Apart from SKS Development, the other consortium partners are Merapoh Resources Corporation Sdn Bhd, Hijaz Refinery Sdn Bhd, Trans Peninsula Petroleum Sdn Bhd, Pristine (M) Sdn Bhd, and Capital (M) Bhd.
Merapoh and Hijaz are involved in reclamation works to house their respective oil refinery plants for the entire project valued at RM50 billion including the pipeline to be built by Trans Peninsula. SKS had earlier proposed to build an inland oil storage facility in Kuala Jerlun.
The Malaysian Insider
24/12/08
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