Country’s largest oil refinery to be in Kedah

KUALA LUMPUR, July 15 — Kedah’s economy received a major boost today with the launch of the largest oil refinery project in Malaysia.

The Merapoh oil refinery in Yan, Kedah will cost US$10 billion (RM35.7 billion) and have a refining capacity of 350,000 barrels per day, nearly twice the capacity of the country’s second largest refinery in Melaka.

The refinery will be developed by Merapoh Resources Corporation and funded by international investors.

The Merapoh refinery will refine crude oil sourced from the Middle East for export, mainly to China.

China’s state oil company China National Petroleum Company (CNPC) has agreed to take up 200,000 barrels per day for 20 years.

CNPC is also expected to take up a stake in Merapoh at some point.

Kedah Mentri Besar Datuk Seri Azizan Abdul Razak says that the state is expecting some RM80 billion worth of oil and gas investments in the future.

“We will continue to give assistance to Merapoh and others as we are a business-friendly government,” he said at the signing ceremony.

When completed in five years, the Merapoh refinery is expected to contribute RM200 million in annual revenues to the state government.

Touching on the subject of the trans-peninsular oil pipeline that was proposed a few years ago to connect Kedah to the east coast, Azizan said the project has been put on hold.

Commenting on the near-loss by PAS in yesterday’s Manek Urai by-election, Azizan told reporters that what was important was PAS managed to retain the state seat.

Azizan also said that relations between PAS and DAP in Kedah were back to normal, after the recent pull-out threat by DAP.