KUALA LUMPUR (Jan 29): Johor royalty-linked Maharani Energy Gateway Sdn Bhd (MEG) has secured a US$2 billion (RM9.47 billion) investment commitment from China Energy International Group Sdn Bhd (CEIG) for a renewable energy project located in the Maharani Energy Gateway Free Trade Zone (MEG FTZ) in Muar, Johor.

The proposed project saw two collaborative framework agreements inked between MEG and CEIG on Monday to build a combined cycle gas turbine (CCGT) power plant and a green hydrogen and green ammonia plant.

CEIG is the Malaysian subsidiary of China Energy Engineering Corp.

“One of the key components of the project is a joint venture between MEG and CEIG to build a green hydrogen plant and a CCGT power plant in the MEG FTZ,” said MEG executive chairman Datuk Dr Daing A Malek at the signing ceremony.

According to CEIG vice president of Southeast Asia regional headquarters Fan Yi, the CCGT plant is to have a peak generation capacity of 1.4GW, while the green hydrogen and green ammonia plant are to produce 3,400 metric tonnes (MT) of hydrogen and 18,800 MT of ammonia per year.

“We start construction after financing closure and first of all we have to negotiate, assisted by MEG, to talk about the off-takers such as TNB and we also get gas supply from Petronas,” Fan said.

“The first priority is we’re going to sign a PPA (power purchase agreement) with MEG, and MEG will supply power to all tenants in the FTZ,” she added.

The MEG project is a sea reclamation project off the coast of Muar which aims to create an energy hub and deep-sea port with three man-made islands covering an area of 1,295 hectares square.

A check with the Companies Commission Malaysia showed that MEG is 45% owned by K Energy Sdn Bhd, followed by the Sultan of Johor and soon-to-be Yang di-Pertuan Agong Sultan Ibrahim ibni Almarhum Sultan Iskandar, with a 40% stake, while Daing holds the remaining 15%.

K Energy is equally owned by Eric Ong Zong Ren and Valerie Ong Huei Zhen.

Minister of Investment, Trade and Industry Tengku Datuk Seri Zafrul Abdul Aziz, who was present to witness the signing ceremony, said government policies such as the New Industrial Master Plan 2030 and the New Energy Transition Roadmap have resulted in collaborations between foreign parties and domestic players.

“To that end, I welcome the MEG project, which is strategically positioned right in the centre of the East-West trade route. It is only five sailing days away from China, an important market for oil and gas, and also 28 sailing days to the Middle East, and 38 days to the Black Sea,” he said during a speech at the signing ceremony.

Zafrul also said that the MEG project would be a compelling proposition as a renewable energy-focused regional hub, as it is accessible to major cities such as Kuala Lumpur and Johor Bahru and benefits from its proximity to vast lands and water bodies.