SIPITANG OIL AND GAS INDUSTRIAL PARK INVESTMENT POTENTIALS AND OPPORTUNITIES 4TH Sabah Oil & Gas Exhibition and Conference April 13, 2015 MAGELLEN SUTERA, KOTA KINABALU Presented by Haji Abdul Kadir Bin Haji Abdullah @O.K.K. Haji Daimsal  

SOGIP is located in the District of Sipitang, South –West of Sabah, SOGIP - LOCATION SOGIP is located in the District of Sipitang, South –West of Sabah, Malaysia SOGIP is the first and only industrial park in Sabah dedicated to oil & gas activities. A state-owned company chaired by the Chief Minister of Sabah called Sipitang Oil & Gas Development Corporation Sdn Bhd (SOGDC) was formed in 2010 to spearhead the development of SOGIP’s 4,065 acres of land in Mengalong, Sipitang. SIPITANG is 145km from capital city of Kota Kinabalu and SOGIP is 12km from Sipitang Town. WHAT AND WHERE IS SOGIP   SABAH FOREST INDUSTRY LABUAN BRUNEI D.S. SFI SOGIP

SOGIP Layout Masterplan with labels.png SOGIP - ADVANTAGES Availability of feedstock of natural gas from Sabah Sarawak Gas Pipeline (SSGP), urea and ammonia from SAMUR and ‘MARKISA’ in SOGIP and methanol from Labuan. SAMUR BRUNEI SOGIP Layout Masterplan with labels.png Proximity to Sabah’s offshore production facilities (Kikeh, Gumusut/Kakap, Kebabangan) The site offers logistic advantages being located at a sheltered area of Brunei Bay, nearby to major shipping lanes and close proximity to Labuan and Brunei Natural water depth (16m-20m) which can cater Single Buoy Mooring (SBM) for VLCC’s Opportunity of tax incentives to SOGIP Investors SOGIP like Pengerang project in Johor is categorised under EPP 13 of NKEA OGE Sector. Readily available market for agriculture since it’s the major industry in Sabah. WHY SOGIP

Conceptual Layout Plan Your Text Here

SOGIP MASTER PLAN SOGIP is proposed to be positioned as Agro-based petrochemical complex taking into consideration of gas characteristic as well as demand in Sabah Key consideration in positioning SOGIP as Agro-based Petrochemical Hub Premier Oil and Gas Industrial Park of Choice for Agro-based Petrochemical in Asia Pacific Base Feedstock Phase 1 Phase 2 UREA Downstream Urea Derivatives : NPK Melamine Urea formaldehyde resin Other development subject to availability of Gas Methane rich composition of natural gas limits the options to; Ammonia and Urea or, Methanol Sabah as one of major producers of Palm and Rubber provide huge local demand for fertilisers from Sipitang. Minimise capital outflow by replacement of imported fertiliser with locally produced Huge potential for local Sabah companies to be involved in the development of downstream urea ammonia and methanol derivatives . AMMONIA Downstream ammonia derivatives : Ammonium Nitrate Diammonium Phosphate Ammonium Chloride Ammonium Sulphate /Caprolactam CO2 Derivatives i.e. Acetal Resins, Dry Gas, EOR METHANOLl SMIs Methanol Derivatives Oil Tankage, Refinery Reticulation /Gas Distribution Centralised Utilities Facilities (CUF) Road and Infrastructure, Port and Jetties, Storage and Warehouse Central Water Supply

Fertilizer: agriculture Fertilizer: palm/rubber Fertilizer: cash crops INVESTMENT SCENARIO Sabah gas is rich in methane, hence limiting petrochemical industry development to ammonia, urea and methanol Ammonia is a more viable petrochemical route due to regional and local market demand as well as volume availability Fertilizer: agriculture Oversupply of market Insufficient gas volume for world scale plant Methane Rich Natural Gas Methanol Ammonia Natural Gas composition in Peninsular and Sabah Fertilizer: palm/rubber Caprolactam Composition Peninsular Sabah Methane 79% 91% Ethane 11% 4% Propane 5% 2% Butane 3% 1% C5 + 0.1% Inert Gas - 1.9% Ammonium Sulphate Huge local demand Diammonium Phosphate Fertilizer: cash crops NPK Ammonium Nitrate Mela-mine Urea Artificial fibre Ammonium Chloride UF Power Generation Power demand in Sabah is limited 100mmscfd = 600 MW Note : ethane volume is not sufficient to develop ethylene and derivatives complex UF – Urea Formaldehyde

INVESTMENT SCENARIO Development of SOGIP as integrated petrochemical and fertilisers hub provide opportunity to substitute imported fertilisers for a more competitive agricultural industry in Sabah and Malaysia Import remains high whilst value of import fluctuates in line with commodity prices Import Quantity of Fertilisers into Malaysia 2004-2020 Value RM Mil/year KMT/year Approx. 30% or 500KMT/year of the total Malaysia’s consumption of the identified fertilisers is consumed in Sabah in year 2012. By 2020, consumption in Sabah is forecast to exceed 600KMT/year. Impact of substitution of imported fertilisers with locally produced to Sabah’s cash flow estimated at; 2012: RM0.760 Billion 2020: RM1.200 Billion Impact to Malaysian fertiliser import substitution : RM4.0 Billion Source : MPOB, Lembaga Getah Malaysia, Lembaga Kemajuan Malaysia, Lembaga Ternak Negara, Department of Agriculture, CRU Group, HIS, IFA

Crude oil and petroleum product storage terminal

With the recent trends, petrochemical development in SOGIP is poised to bring benefit to the community SOGIP Construction Engineering Services Procurement Downstream Manufacturing Training Centres Tourism Recreational Facilities Multiplier Efefct Residential & Commercial Financial Services Transportation Attract foreign investments into Sabah with key infrastructure and utilities; support SOGIP vision Create spin-off effects to spur further economic activities Create employment opportunities for locals Provide opportunities for Sabah companies to participate

Summary of Sabah Work Force Profile CURRENT SITUATION AND DEVELOPMENT Sabah: Work Force Profile OGE EPPs, Manpower and Years 2013 2014 2015-2020 Sabah having the Highest % of Foreign Labours (37.5% in 2011, IDS Study 2012); Having the Youngest Working Age Group (69.2% aged 39 and below); 75% of Unemployed Persons are 30 and below; Most Jobs are Low Skilled (67.8% PMR and below); and Low Paid (20% lower than Sarawak and 45% lower than Peninsular Malaysia. Kimanis Power Plant (300) SOGT/SSGP (180) SOGIP SAMUR (400) Lahad Datu Re-Gas Terminal (60) Markmore Group (200) Lahad Datu Power Plant (300) PETRONAS Ammonia Plant 2 (180 by 2018) Gas Separation (97) Sipitang Chemicals (110 by 2015) Pristine Oil (500 by 2017) Petro Asia Pac Sdn Bhd (400 by 2017) Aplio Refinery Sabah (523 by 2020) 480 660 1090 Summary of Sabah Work Force Profile 2007 2008 2009 2010 2011 Labour Force ('000) 1,267.7 1,294.2 1,345.3 1,589.9 1,640.0 Employed ('000) 1,198.6 1,230.5 1,270.6 1,507.8 1,554.8 Unemployed ('000) 69.2 63.8 74.6 82.1 85.2 Unemployment Rate (%) 5.5 4.9 5.2 Labour Force Participation Rate (%) 65.3 64.5 65.1 65.2 66.7 2010 yearly data has been revised based on revised population estimates that take into account on recent trends of fertility and migration. Data excludes Labuan. *source: Sabah Yearbook of Statistics 2011

Infrastructure Facilities Supporting Facilities INFRASTRUCTURE & SUPPORTING FACILITIES PLAN Basic infrastructure will be constructed on site and supporting services facilities is being planned in SOGIP Road network within SOGIP will be of an industrial standard to cater heavy machineries and lorries Roads Multipurpose jetty will be constructed for the overall use and outbound of products for the users of SOGIP Ports Infrastructure Facilities There will be Centralized Utilities Facilities (CUF) to generate electricity and planning to construct new 275kV transmission line Electricity supply By Q1 2014, a new water treatment plant will be completed with capacity of 40MLD Water supply Logistics & Medium and Light Industry Warehousing and storage facilities services & Maintenance Service Providers Schedule Waste Management Handling scheduled waste within SOGIP Supporting Facilities Human Resource Training Facility Centre to conduct and provide human capital training for industries within SOGIP Commercial Services Government services, Office complexes

SOGIP – TAX INCENTIVES On 1st Nov 2012, Federal Treasury has approved the following blanket financial incentives for the relevant activities in Sipitang Oil & Gas Industrial Park. Promotions for SOGIP was also initiated by SOGDC. The following incentive policy applies to applications received by SEDIA up until 31st December 2020. Source: SEDIA website; http://www.sedia.com.my

DEVELOPMENT BY PRIVATE & RELEVANT AGENCIES: DEVELOPMENT BY INVESTORS: LAYOUT PLANNING Development will be supported by SOGIP, Relevant agencies and Private Sectors DEVELOPMENT BY SOGIP: Internal Infrastructure Roads (Single carriage way to be expanded in the future) Drainage Street light Fibre optics network Detention pond DEVELOPMENT BY PRIVATE & RELEVANT AGENCIES: CUF and Transmission Lines Water Supply Port DEVELOPMENT BY INVESTORS: Plot area Site clearance Earthworks Site preparation Internal Roads & Drainage (Plant area) Zoning criterion is developed to segregate the sectors based on the following:- Safety consideration (flammable, toxic and explosiveness of material) Logical layout of manufacturing operations to reduce piping runs. Reduce traffic congestion and unnecessary movement within the park limit by clustering related industries

Development plan for type of investments in SOGIP INVESTMENT SCENARIO-DEVELOPMENT PLAN Development plan for type of investments in SOGIP Phase 1 2023 2024 2022 2021 2020 2019 2018 2017 2016 2015 2014 Phase 2 PETROCHEMICAL & FERTILIZERS BULK STORAGE & HEAVY INDUSTRIES INDUSTRIES SUPPORTING INDUSTRIES Transportation Packaging Warehouse (Storage Facilities) MARKISA (Ammonia Plant) Printing UTILITIES & INFRASTRUCTURE Road, Streetlights & Drainage Electricity , Water & ICT Centralized Utilities Facility (CUF) Port & Jetty Phase 3 Phase 4A Phase 4B Oil Refinery Fabrication Yard Gas Reticulation Bio-based Industries Bulk Products Distribution Terminal Ammonia Derivatives Urea Derivatives Methanol Derivatives Ship Repair Services Bulk Storage SMI Investments in SOGIP Phase 1: A. Planned investment Fertilizers Ammonia Plant Ammonia Derivatives Urea Derivatives Utilities Centralized Utilities Facility (CUF) Gas Reticulation 3.Bulk Storage Bulk Oil Storage Bulk Products Distribution Terminal 4.Other Investment Bio-based industries Fabrication (shipping, onshore & offshore structures) Refinery   Phase 1: B. Planned Development by SOGIP Infrastructure Road & Street Lights Drainage Port and Jetty Telecommunications Phase 2: Subject to future availability of gas Methanol Derivatives Other heavy industries Link to Port & Jetty

DEVELOPMENT BY PRIVATE & RELEVANT AGENCIES: DEVELOPMENT BY INVESTORS: LAYOUT PLANNING Development will be supported by SOGIP, Relevant agencies and Private Sectors DEVELOPMENT BY SOGIP: Internal Infrastructure Roads (Single carriage way to be expanded in the future) Drainage Street light Fibre optics network Detention pond DEVELOPMENT BY PRIVATE & RELEVANT AGENCIES: CUF and Transmission Lines Water Supply Port DEVELOPMENT BY INVESTORS: Plot area Site clearance Earthworks Site preparation Internal Roads & Drainage (Plant area) Zoning criterion is developed to segregate the sectors based on the following:- Safety consideration (flammable, toxic and explosiveness of material) Logical layout of manufacturing operations to reduce piping runs. Reduce traffic congestion and unnecessary movement within the park limit by clustering related industries

PHASE 4B Legend : Phase 1 Phase 2 Phase 3 Back Phase 4 Break Waters

More information on SOGIP , visit www. sogip. com More information on SOGIP , visit www.sogip.com.my or email to info@sogip.com.my for any enquiries . THANK YOU