Malaysia's national oil firm Petronas will build an ammonia and urea plant in eastern Sabah state as part of a RM2.5 billion (US$663 million) investment program there, reports said Thursday.

Petronas will also construct a new oil and gas terminal at a cost of RM874-988 million which is to be operational by January 2010, Sabah Chief Minister Musa Aman said.

The Star daily quoted Musa as saying that Petronas had not yet settled on a site for the RM1.52 billion ammonia and urea plant but that the oil and gas terminal would be located in south-western Kimanis district.

"This is the best news for Sabah in a long time," he said from the state capital Kota Kinabalu.

"The economic spin-offs and job opportunities to be brought about by these projects will be significant," he said.

No sufficient capacities

Musa said the energy terminal would receive up to 300,000 barrels of oil per day from deep water fields off the state that were discovered since 2000.

He told the New Straits Times that the existing crude oil terminal and natural gas terminal elsewhere in the state did not have sufficient capacities to handle output from the fields.

"Kimanis was selected as it had a deep-sea front suitable for crude oil export and is centrally located to receive oil and gas production from offshore fields, making the project cost-effective in terms of pipeline maintenance," he said.