By Datuk Ts Dr. Hj Ramli Amir, former President of the Chartered Institute of Logistics and Transport (CILT) Malaysia and Vice-President of CILT International for Southeast Asia
KOTA KINABALU: SOGIP Port represents a transformational leap in Malaysia’s maritime infrastructure, positioned to establish Sabah as a dominant force in Southeast Asian trade and industry.
With its unprecedented capacity and strategic integration with major industrial developments, the port is set to fundamentally reshape Sabah’s economic landscape and strengthen Malaysia’s position as a regional maritime power.
Strategic Drivers Behind SOGIP Port Development
The development of SOGIP Port emerged from Sabah’s ambitious vision to support next-generation industries that existing maritime infrastructure could not adequately serve. The catalyst was the Sipitang Oil and Gas Industrial Park (SOGIP), designed as Malaysia’s premier petrochemical hub, which required modern port facilities capable of handling massive industrial volumes.
The announcement of the Esteel green steel project—a three-phase RM31 billion investment that will become Malaysia’s largest green steel initiative—underscored the urgent need for world-class maritime infrastructure. This project alone will produce 2.5 million tonnes of hot briquetted iron annually in its first phase, with additional phases planned to include steelmaking and rolling facilities.
Sabah’s strategic objectives extend beyond raw material exports to encompass higher-value manufacturing and regional economic integration. The port development aligns with Malaysia’s commitments under the BIMP-EAGA framework, which encompasses nearly USD 401.6 billion in combined GDP across Brunei, Indonesia, Malaysia, and the Philippines. BIMP-EAGA’s trade volumes have shown resilient growth, with merchandise exports totalling USD 119 billion and the subregion contributing 18.2% to the combined GDP of its member countries.
Infrastructure Design and Capacity Revolution
SOGIP Port’s infrastructure represents a quantum leap in port design and capacity.
The facility features deep-water berths capable of accommodating the world’s largest bulk vessels, with water depths ranging from 16 to 25 metres sufficient for Very Large Crude Carriers (VLCC) and Single Buoy Mooring systems. This overcomes a critical limitation of Sabah’s existing ports, which cannot handle modern megaships efficiently.
The port’s comprehensive design includes specialized terminals for diverse cargo types: liquid bulk facilities for LNG and chemicals, dry bulk terminals for commodities, containerized cargo handling systems, and specialized freight terminals for steel products and petrochemicals. Integration with internal pipelines, manufacturing facilities, and the Pan Borneo Highway ensures seamless cargo movement from production sites to global markets.
Port throughput capacity: SOGIP Port’s transformational impact on Sabah’s maritime infrastructure
At full operational capacity, SOGIP Port will handle 30 million tonnes annually in Phase 1, with ultimate expansion potential to 50 million tonnes across Phases 2 and 3. This represents a 54.2% increase over current Sabah port capacity in Phase 1 alone, and a remarkable 157.1% increase when fully developed.
The transformational impact becomes evident when considering that SOGIP Port’s initial capacity will exceed the combined throughput of all existing Sabah maritime gateways.
Digital Innovation and Trade Facilitation
Central to SOGIP Port’s competitive advantage is its integration with Malaysia’s National Single Window (NSW) system for trade facilitation. This digital platform, operational since 2009, processes over 100 million electronic transactions annually and connects more than 45,000 users with 36 permit issuing agencies, 16 banks, and 167 customs stations. The system maintains 99.9% uptime and enables 24/7 processing of trade documentation.
The digital transformation eliminates traditional paper-based processes that previously required duplicate documents for different authorities. By enabling data reusability and single connectivity to multiple agencies, the system significantly reduces clearance times and administrative friction. This technological foundation positions SOGIP Port to operate at global efficiency benchmarks from its opening.
Economic Impact and Investment Magnetism
SOGIP Port’s economic impact extends far beyond port operations, serving as a catalyst for industrial transformation across Sabah. Major investments already committed to the SOGIP ecosystem total RM66.38 billion, including the Esteel steel complex (RM31 billion), SOGIP Energy Hub (RM8.88 billion), Petroventure refinery (RM15.5 billion), and PETRONAS’s SAMUR fertilizer facility (RM4.6 billion).
The Esteel project exemplifies the port’s role in attracting high-value industries. Using natural gas as a reducing agent instead of traditional coke and coal, the green steel operation reduces carbon emissions by 70% while producing 2.5 million tonnes of hot briquetted iron annually. When fully operational across all phases, the project will create approximately 10,000 jobs and generate substantial demand for raw materials and export capacity.
The Petroventure refinery, with its 150,000 barrels per day capacity and 3 million cubic meters of storage, will create nearly 5,000 job opportunities and attract over USD 3.5 billion in foreign direct investment. Combined with natural gas supply agreements totalling 150 million standard cubic feet per day from PETRONAS, these developments establish SOGIP as a comprehensive energy and industrial hub.
Regional Integration and Trade Enhancement
SOGIP Port’s strategic location within the BIMP-EAGA economic zone positions it to capture significant regional trade opportunities. The subregion recorded total merchandise trade exceeding USD 166 billion in 2023, with BIMP-EAGA countries contributing 28.33% of global merchandise trade volume. Foreign direct investment flows within the region reached USD 93.4 billion from 2017 to 2023, demonstrating strong economic momentum.
Sabah’s trade performance provides a solid foundation for SOGIP Port’s operations. The state’s total trade exceeded RM100 billion for three consecutive years, reaching RM107.8 billion in 2024—a 2.7% increase from 2023. Major export commodities include crude petroleum (RM21.3 billion), palm oil (RM17.3 billion), and liquefied natural gas (RM4.6 billion), collectively representing 70.4% of total exports.
The port’s connectivity to the Pan Borneo Highway, spanning over 2,000 kilometres and linking Sabah, Sarawak, and Brunei, enhances its regional accessibility. This infrastructure connection reduces transportation costs and time, making Sabah’s products more competitive in regional markets. The highway’s completion will further strengthen trade ties within the BIMP-EAGA corridor and improve access to emerging markets like Indonesia’s new capital city Nusantara.
Malaysia’s participation in major trade agreements amplifies SOGIP Port’s potential. The Regional Comprehensive Economic Partnership (RCEP), covering 29.46% of global population and 30.64% of world GDP, offers preferential market access to 2.3 billion consumers. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) eliminates 95% of tariffs among 11 member countries, providing Malaysian exporters enhanced access to markets in Canada, Mexico, and Peru.
Sabah’s Economic Transformation
The development of SOGIP Port occurs within the context of Sabah’s broader economic evolution. The state contributed 5.5% to Malaysia’s GDP in 2024, ranking among the top six contributing states alongside Selangor, Kuala Lumpur, Johor, Sarawak, and Penang. Sabah’s GDP reached RM84.3 billion in 2024, representing steady growth from RM77.8 billion in 2020.
This economic performance reflects successful diversification efforts beyond traditional commodity exports. The manufacturing sector contributed 7.2% to state GDP in 2024, with manufactured goods exports growing 9.3% to reach RM12.0 billion. The services sector remains the largest contributor at 52.4% of GDP, while mining and quarrying accounts for 22.0%.
Investment flows demonstrate growing confidence in Sabah’s economic prospects. The state recorded RM11.34 billion in investments in 2023, ranking seventh highest in Malaysia with 13.3% from the manufacturing sector. Major industrial parks including SOGIP and the Kota Kinabalu Industrial Park have experienced increased tenancy, prompting the state government to approve three additional industrial parks in Kota Belud, Beaufort, and Kudat.
Addressing Implementation Challenges
Despite its transformative potential, SOGIP Port faces several operational and developmental challenges that require strategic management. Customs and border clearance procedures in East Malaysia historically lag behind Peninsular Malaysia in efficiency, placing pressure on authorities to ensure SOGIP operates at international benchmarks. The port’s success depends on maintaining processing speeds and transparency comparable to leading regional ports.
Physical connectivity throughout Sabah’s hinterland requires continued investment to maximize the port’s effectiveness. The federal government allocated RM1.06 billion for 224 infrastructure projects in Sabah during 2024, focusing on rural roads, bridges, water supply, and electricity infrastructure. These improvements are essential for rapid cargo movement between production sites and the new port facility.
Environmental sustainability presents another critical challenge, particularly given the scale of planned steel production and chemical handling operations. The Esteel project underwent comprehensive Environmental Impact Assessment (EIA) review and received clearance from the Environmental Protection Department, with formal commitments to environmental sustainability throughout operations. Continued adherence to robust environmental standards and ongoing technological upgrades will be essential for maintaining social license and regulatory compliance.
Inclusive development remains a priority to ensure SOGIP Port’s benefits reach small and medium enterprises and the broader population. The state government’s emphasis on 80% local workforce participation in major projects reflects commitment to local development. Training and skills development programs, including partnerships with Universiti Malaysia Sabah, aim to prepare Sabahans for high-value employment in the expanding industrial sector.
Prospects and Strategic Implications
SOGIP Port represents more than infrastructure development—it embodies Sabah’s strategic transformation from a commodity-exporting economy to a dynamic, value-added industrial and trade hub. The port’s modern facilities, digital integration, and enabling policy environment to establish new benchmarks for gateway infrastructure in East Malaysia.
As the port reaches operational status and capacity expansions proceed, its impact will extend beyond Sabah to reinforce Malaysia’s position as a maritime power in Southeast Asia. The integration of green technologies, sustainable operations, and regional connectivity positions SOGIP Port at the forefront of next-generation port development.
Success will depend on continued strategic investment, effective governance, and ongoing innovation. With targeted execution and sustained commitment to excellence, SOGIP Port is positioned to define Sabah’s economic trajectory for generations while contributing to Malaysia’s vision of regional leadership in trade and industry.
The convergence of strategic location, world-class infrastructure, digital innovation, and major industrial investments creates a unique opportunity for transformational economic impact. SOGIP Port stands as a testament to Malaysia’s commitment to infrastructure excellence and its determination to capture the opportunities of evolving global trade patterns.
The Evolution of SOGIP Port: Sabah’s New Maritime Frontier SOGIP Port represents a transformational leap in Malaysia’s maritime infrastructure, positioned to establish Sabah as a dominant force in Southeast Asian trade and industry. With its unprecedented capacity and strategic integration with major industrial developments, the port is set to fundamentally reshape Sabah’s economic landscape and strengthen Malaysia’s position as a regional maritime power.
