Abang Johari inspecting the site for the Sarawak Petrochemical Hub in Kidurong, Bintulu.

KUCHING: The development of Sarawak Petrochemical Hub (SPH) has been described as a bold and far-sighted initiative.

The initiative by Chief Minister Datuk Patinggi Abang Johari Tun Openg would augur well for the downstream activities of the state’s oil and gas industry, said industry sources.

“The SPH will not only provide 74,000 new job opportunities but could potentially contribute an additional RM16 billion to RM20 billion per annum to the state’s gross domestic product (GDP).

“It will also spearhead efforts to enable the state to churn high value downstream oil and gas products for export,” industry sources interviewed by New Sarawak Tribune said on Friday.

Currently Sarawak’s exports of oil and gas products are mainly commodity-based with value-added activities done abroad.

“With the SPH in place, Sarawak would have the ability to process the raw commodities into high value products for export,” they said.

NST also understands that several international petroleum companies are in talks to jointly set up mercury reduction facilities, with capital investment to the tune of USD5 billion, at the proposed petrochemical hub.

“It is not fake news. In fact, negotiations among the interested parties are on-going,” the sources added.

It is understood that the petroleum companies involved are mainly those currently operating the production sharing contracts (PSCs) in oil and gas exploration offshore Sarawak.

Sarawak Economic Development Corporation (SEDC) will play a critical role in managing and developing the hub.