Kota Kinabalu: The total investment value of a multi-billion green steel manufacturing plant by Esteel Enterprise Sdn Bhd in Sipitang Oil and Gas Industrial Park (Sogip) has gone up to RM31 billion from its initial RM19.6 billion following detailed technical assessments and scope enhancements, said State Industrial Development and Entrepreneurship Minister Datuk Phoong Jin Zhe
“Regarding the total investment value, it is true that initially when the investors came in, they registered their interest and at that time projected a total capital expenditure (capex) of RM19.6 billion.
“But following further discussions, a lot of refinements were made, and with the updated specifications that were reviewed, the total assessed investment was revised to RM31 billion, as announced recently.
window.googletag = window.googletag || {cmd: []};googletag.cmd.push(function() {googletag.defineSlot('/22826383987/dailyexpress_inline', [1, 1], 'gpt-passback').addService(googletag.pubads());googletag.enableServices();googletag.display('gpt-passback');});“So this figure comes from the latest review and submissions by the company, which covers a phased investment including the construction of the plant, jetty facilities, and various other supporting infrastructure,” he said when replying to a supplementary question of Kapayan Assemblywoman Datuk Jannie Lasimbang during question time at the State Legislative Assembly sitting.
Jannie had sought clarification on the reasons behind the significant jump from RM19.6 billion in 2022 to RM31 billion recently.
Previously, Phoong said RM19.6 billion was for all three phases, but this adjustment happened due to changes in the technical design and scope of work, estimation of costs that could only be finalised after more detailed technical studies were completed.
This is reviewed from time to time, he added,
“This is a common practice. So initially the projected cost might have looked like one figure, but over the past three years, costs and scope have evolved, and technology has also advanced.
“Other several factors also took into account like currency exchange rates, rising construction material prices, and the growing costs of new technologies,” he said.
Earlier, Phoong said Esteel had ramped up its investment and operational capacity in Sabah, signalling strong confidence in the state’s economic prospects with several major milestones achieved in recent months.
He said this confidence was evidenced by the signing of the Land Lease Agreement for the development of Phase 2 and Phase 3 at the Sipitang Oil and Gas Industrial Park (SOGIP) on December 31, 2024.
He added the move was accompanied by a RM35 million deposit as an initial step to facilitate the investment’s implementation.
Following the issuance of the Manufacturing License (FML) at the end of January this year, Phoong said Esteel had taken proactive measures and systematically took follow-up actions to secure execution of its investment at Sogip, Sipitang.
“In February, Esteel signed a Natural Gas Supply Agreement with Sabah Energy Corporation (SEC) and Petronas.
“This plays a critical role in guaranteeing a stable and sufficient supply of natural gas and energy for the company’s green steel manufacturing plant at Sogip.
“This step further strengthens the assurance of essential utility needs required for the success of this high-impact investment project,” he said.
Phoong said this when replying to Jannie on the latest development and status of the Esteel project up to the first quarter of this year.
“After completing the redesign process to accommodate the expanded scale of operations, Esteel focused fully in March and April 2025 on conducting a transparent and competitive bidding process to select a contractor for the construction of a private jetty.
“As a result of this effort, Esteel signed the Phase 1 Jetty Construction Contract with China Communications Construction Company (CCCC) on May 30, 2025 — the same date as the official launch ceremony for the company’s Phase 1 Investment Project, which was officiated by the Prime Minister.
“This milestone serves as a critical benchmark driving the implementation of supporting infrastructure necessary to realize this strategic high-impact investment,” he said.
