PIPC Grows By Leaps And Bounds, Building Momentum For Next Wave Of Growth

By Nor Baizura Basri

KUALA LUMPUR, Sept 11 (Bernama) -- Pengerang Integrated Petroleum Complex (PIPC), Malaysia’s foremost oil and gas development initiative that has grown by leaps and bounds over the past 11 years, is actively attracting interest beyond our shores, with the second phase of its development ending next year.

Propelling its future growth includes bright prospects for the petrochemicals industry, setting up industrial parks, incentives to attract global investors, support from forward-looking energy transition policies, the country’s industrial master plan and, importantly, bringing in the best talents.

bootstrap slideshow

Johor Petroleum Development Corporation (JPDC) deputy chief executive Izhar Hifnei Ismail said that post-Covid-19, the outlook of the petrochemicals and chemicals sector has been steadily growing.

“For the next three to four years, there are indications that the demand for petrochemicals and chemical products, raw materials and finished goods will increase,” he told Bernama in an interview in Johor Bahru recently.

JPDC’s main role is to coordinate the development of PIPC and be a one-stop information centre to assist investors, oil and gas players, and the local community.

bootstrap slideshow

Based on inputs from the industry, he said as long as the population continues to increase and the global economy continues to grow, there would be brisk demand in tandem for petrochemicals and chemicals products.

“Therefore, the prospects for Malaysia’s petrochemicals and chemicals industry are positive,” he said.

Izhar said PIPC, which spanned 25 years of development with four phases, has seen the completion of phase one (2013-2019), comprising two catalytic projects. 

The projects are the Pengerang Deepwater Terminals, a storage facility for oil and petroleum products developed by Dialog Group Bhd, and the Pengerang Integrated Complex (PIC), consisting of refinery and petrochemical facilities developed by Petronas. 

POLICIES AND INCENTIVES IN PLACE SPARK MORE INTEREST

On Oct 13, 2023, Prime Minister Datuk Seri Anwar Ibrahim announced that the PIPC is designated as a hub for petrochemical and chemical activities, to be supported by incentives for investments in selected activities and for developing industrial parks. 

With the special status and incentives introduced for chemical and petrochemical activities, Izhar said it has somehow increased inquiries and heightened the PIPC’s attractiveness.

“We are working on bringing some other industries into PIPC. We have about 10 to 15 interested prospects looking at PIPC as an investment location, but they are still in the very early stages.

“We have been talking to some of these companies for about one or two years, and a few of them are slowly developing their (interest) into bids (and) they are close to considering making the final investment decision.

“Nevertheless, it is still a work in progress at various stages. I believe that with the incentives coming and all that, this could provide further motivation for them to say yes and that Malaysia’s Pengerang is the place (for investment),” he added.

Izhar said a total of RM10 billion worth of committed investments have been recorded for the second phase of PIPC development, which also includes the final investment decision of Petronas and its joint venture partners, Enilive SpA and Euglena, on the development of a biorefinery in Pengerang Integrated Complex (PIC).

He said this interest is also supported by policies such as the National Energy Policy, National Energy Transition Roadmap (NETR) and New Industrial Master Plan 2030 (NIMP), which emphasise the growth of the oil and gas and energy-related sectors.

MADANI ECONOMY FRAMEWORK, INCREASING HUMAN RESOURCES VALUE CHAIN 

To enhance investor confidence in Pengerang, Izhar said that for the last three to four years, JPDC has advocated for special incentives to be given to the oil and gas development location as a hub to support and promote downstream oil and gas petrochemical and chemical activities.

He said that over the last six to seven months, JPDC, together with the  Malaysian Investment Development Authority (MIDA) and Ministry of Finance (MOF), have been preparing the guidelines to prepare the process for companies to apply and obtain approval for the special incentives. 

He added the special incentive package targeted at the manufacturing sector, as well as a tax incentive package for industrial park developers, has been open for application from October last year and will be available until December 2028.

Turning to the issue of human resources, Izhar said JPDC is committed to bringing in the best talents.

He said one example of meeting workforce needs is through the Contractor Development Programme (CDP), where contractors and entrepreneurs in the downstream oil and gas, petrochemical, and chemical industries are given proper training in skills and competency to meet industry standards.

“What we are doing now is assisting the smaller, the up-and-coming service providers to become skilled and competent and have the capabilities to stay in the industry.

“Currently, we have 15 local contractors in Johor serving the downstream oil and gas industry that have been put under the CDP.

“We have confidence that Malaysian service providers can actually grow, provided they are given the chance to build up their skills, competencies and resources such as financial capability. What they need is guidance, advice, and support in terms of funding,” Izhar added.

JPDC said these efforts will support the growth of the industry in Pengerang, which will have a national impact.

It said that this will result in skilled and competent workers where companies and investors, both foreign and local, not only vying for opportunities in the local downstream oil and gas industry but also outside Pengerang, regionally and globally.

“So, in the long run, we believe we are fulfilling the aspirations of the MADANI economy. We recognise the fact that various policies have special targets, so all of these need to be coordinated and aligned.

“That is the big picture under MADANI. It is not only about creating new opportunities but also enhancing the capabilities of various participants in the economy,” said Izhar.

-- BERNAMA