The controversial oil refinery project in Pengerang, Johor, appears to have hit a snag following a statement from Chinese Petroleum Corporation (CPC) chairperson Lin Sheng-Chung on a possibility that its subsidiary company may be shut down.

This is because of changes in the petrochemical industry development, Lin is quoted as saying in a report by Taiwan's Commercial Times .

The subsidiary company is Taiwan Kuokuang Petrochemical Technology. CPC is a state-owned oil refinery corporation.

Commercial Times also quotes Lin as saying that as for Kuokuang's investment project in Pengerang, only the environment assessment had been completed.

He added that the recent petrochemical energy reforms could even result in the Pengerang investment project being called off and for the subsidiary petrochemical plant to shift its investment to China.

Subsequently, Lin said, the company would bear the losses of withdrawing the project from Pengerang, which mainly would be the expenses incurred in Johor so far.

The RM60 billion Petronas Refinery and Petrochemical Integrated Development (Rapid) project will eventually occupy 2.43 hectares of land in Pengerang, affecting at least 15 villages in the area at the southern tip of Johor.

Kuokuang is only one of the investors in the Rapid project and it was expected to acquire a piece of land for its plant in Pengerang.

The local people and environmentalists in Malaysia have expressed their concerns that the Rapid project would pollute the environment and affect fishing at sea, which is the main source of income for the locals.