Malaysia's Resource-Rich Sarawak State

 

18/04/2011 (Reuters) - Malaysia's Sarawak state, which goes to the polls on Sunday, is rich in resources such as natural gas, timber and crude palm oil.

Following is a summary of the key commodities and projects in the state located on Borneo island:

OIL & GAS

* National oil company Petronas operates one of the world's largest liquefied natural gas (LNG) complexes in Sarawak with eight production trains that have an annual capacity of 24 million tonnes.

* Shipments of Sarawak's LNG meet a large chunk of demand from South Korea, Taiwan and Japan. In 2007, LNG from Sarawak was also shipped to China.

* Petronas said it discovered new fields offshore Sarawak that had 100 million barrels of oil and 0.2 trillion standard cubic feet of gas in place. The discovery could see oil majors such as Shell (RDSa.L: Quote) and ExxonMobil ask for more production-sharing contracts.

TIMBER

* Malaysia is the world's fourth-largest exporter of tropical timber with the bulk of the shipments coming from Sarawak where most of the timber barons have their company headquarters.

* Exports are falling as Sarawak now allows only 40 percent of the state's production to be shipped out, while 60 percent must be used for the domestic timber processing industry.

* Analysts have raised their target prices for Sarawak timber firms such as Rimbunan Hijau Group's listed unit Jaya Tiasa , WTK and Samling as Japan will need timber to rebuild after the March 11 earthquake and tsunami.

* Some investors are shunning several of these firms based on their environment track record. Norway has barred its $550 billion sovereign wealth fund from investing in Samling and its unit Lingui Development over allegations of environmental damage in Sarawak.

PALM OIL

* Sarawak accounted for more than a tenth of total palm oil production of 17 million tonnes in 2010. Key planters in the state include Sarawak Oil Palm and Sime Darby . Malaysia is the world's No.2 palm oil producer.

* Last week, an industry body for eco-friendly palm oil censured IOI Corp for green and social violations in Sarawak and threatened further sanctions if the planter did not resolve the issues.

* Wetlands International and Dutch remote sensing institute Sarvision said large areas of carbon rich peatswamp forests were being destroyed in Sarawak to make way for estates.

POWER GENERATION

* Sarawak plans to double its hydropower capacity to 6,000 megawatts (MW) in 2015 by building five more dams to complement the Bakun and Murum dams that have a combined capacity of more than 3,000 MW.

* State government officials have declined to name a price for the expansion but they are counting on investors like China's state run power grid operator to help build the dams to exploit Sarawak's rivers.

* Sarawak Energy, which manages the power assets in the state, said it was in talks with 20 energy customers including smelters and processors on power tariffs.

SMELTERS

* Several big ticket aluminium projects have been announced but none has been confirmed pending the finalisation of the power purchase agreements, which could take place at the end of 2011.

* The biggest is Rio Tinto's $2 billion smelter joint venture with Cahya Mata Sarawak . The plant will have an initial annual capacity of 720,000 tonnes with an option to expand to 1.5 million tonnes.

* Another mega project is the 330,000-tonne aluminium smelter by Aluminium Corp of China with a local partner that is estimated to cost $1 billion.

* Projects in the pipeline include Australian OMH's proposed manganese plant in Sarawak and Tokuyama's planned $780 million polysilicon processing plant. [ID:nL3E7FE2DN]

* Press Metal has started operating its 120,000- tonne capacity aluminium smelter in Sarawak in which Japan's Sumitomo Corp has an equity stake. The plant is set to be the first customer of power from Bakun dam. The Malaysian firm also has a second phase expansion plan for a 240,000-tonne capacity plant in Sarawak.

PRECIOUS METALS

* Canadian miner Olympus Pacific Minerals has raised its stake in a small gold field in Sarawak that has about 1.8 million ounces in reserves. 

Sarawak

Palm Oil Processing operation

Research and development work in many disciplines -biochemistry, chemical and mechanical engineering - and the establishment of plantations, which provided the opportunity for large-scale fully mechanised processing, resulted in the evolution of a sequence of processing steps designed to extract, from a harvested oil palm bunch, a high yield of a product of acceptable quality for the international edible oil trade. The oil winning process, in summary, involves the reception of fresh fruit bunches from the plantations, sterilizing and threshing of the bunches to free the palm fruit, mashing the fruit and pressing out the crude palm oil. The crude oil is further treated to purify and dry it for storage and export.


Crude Palm Oil Extraction

Large-scale plants, featuring all stages required to produce palm oil to international standards, are generally handling from 3 to 60 tonnes of FFB/hr. The large installations have mechanical handling systems (bucket and screw conveyers, pumps and pipelines) and operate continuously, depending on the availability of FFB. Boilers, fuelled by fibre and shell, produce superheated steam, used to generate electricity through turbine generators. The lower pressure steam from the turbine is used for heating purposes throughout the factory. Most processing operations are automatically controlled and routine sampling and analysis by process control laboratories ensure smooth, efficient operation. Although such large installations are capital intensive, extraction rates of 23 - 24 percent palm oil per bunch can be achieved from good quality Tenera (DxP).

Conversion of crude palm oil to refined oil involves removal of the products of hydrolysis and oxidation, colour, odor and flavour. After refining, the oil may be separated (fractionated) into liquid (olein) and solid phases (stearin) by thermo-mechanical means (controlled cooling, crystallization, and filtering), and the liquid fraction (olein) is used extensively as a liquid cooking oil in tropical climates, competing successfully with the more expensive groundnut, corn, and sunflower oils.

Palm Kernel Extraction

Extraction of oil from the palm kernels is generally separate from palm oil extraction, and will often be carried out in mills that process other oilseeds (such as groundnuts, rapeseed, cottonseed, shea nuts or copra).

The stages in this process comprise grinding the kernels into small particles, heating (cooking), and extracting the oil using an oilseed expeller  or petroleum-derived solvent. The oil (Crude Palm Kernel Oil) then requires clarification in a filter press or by sedimentation. Extraction is a well-established industry, with large numbers of international manufacturers able to offer equipment that can process from 10 kg to several tonnes per hour.

Palm oil processors of all sizes go through these unit operational stages. 

 

They differ in the level of mechanisation of each unit operation and the interconnecting materials transfer mechanisms that make the system batch or continuous. The scale of operations differs at the level of process and product quality control that may be achieved by the method of mechanisation adopted.

The general flow diagram is as follows:

PALM OIL PROCESSING UNIT OPERATIONS

Harvesting technique and handling effects
 

In the early stages of fruit formation, the oil content of the fruit is very low. 

 

As the fruit approaches maturity the formation of oil increases rapidly to about 50 percent of mesocarp weigh. 

 

In a fresh ripe, un-bruised fruit the free fatty acid (FFA) content of the oil is below 0.3 percent.

However, in the ripe fruit the exocarp becomes soft and is more easily attacked by lipolytic enzymes, especially at the base when the fruit becomes detached from the bunch. The enzymatic attack results in an increase in the FFA of the oil through hydrolysis. Research has shown that if the fruit is bruised, the FFA in the damaged part of the fruit increases rapidly to 60 percent in an hour. There is therefore great variation in the composition and quality within the bunch, depending on how much the bunch has been bruised.

Harvesting involves the cutting of the bunch from the tree and allowing it to fall to the ground by gravity. Fruits may be damaged in the process of pruning palm fronds to expose the bunch base to facilitate bunch cutting.

As the bunch (weighing about 25 kg) falls to the ground the impact bruises the fruit. During loading and unloading of bunches into and out of transport containers there are further opportunities for the fruit to be bruised.

Sometimes trucks and push carts, unable to set bunches down gently, convey the cargo from the collection centers to the processing site. Again, tumbling the fruit bunches from the carriers is rough, resulting in bruising of the soft exocarp. In any case care should be exercised in handling the fruit to avoid excessive bruising.

One answer to the many ways in which harvesting, transportation and handling of bunches can cause fruit to be damaged is to process the fruit as early as possible after harvest, say within 48 hours. However the author believes it is better to leave the fruit to ferment for a few days before processing. Connoisseurs of good edible palm oil know that the increased FFA only adds ‘bite’ to the oil flavour. At worst, the high FFA content oil has good laxative effects. The free fatty acid content is not a quality issue for those who consume the crude oil directly, although it is for oil refiners, who have a problem with neutralization of high FFA content palm oil.

The main point of clarification is to separate the oil from its entrained impurities. The fluid coming out of the press is a mixture of palm oil, water, cell debris, fibrous material and ‘non-oily solids’. Because of the non-oily solids the mixture is very thick (viscous). Hot water is therefore added to the press output mixture to thin it. The dilution (addition of water) provides a barrier causing the heavy solids to fall to the bottom of the container while the lighter oil droplets flow through the watery mixture to the top when heat is applied to break the emulsion (oil suspended in water with the aid of gums and resins). Water is added in a ratio of 3:1. The diluted mixture is passed through a screen to remove coarse fibre.

The screened mixture is boiled from one or two hours and then allowed to settle by gravity in the large tank so that the palm oil, being lighter than water, will separate and rise to the top. The clear oil is decanted into a reception tank. This clarified oil still contains traces of water and dirt.

 

To prevent increasing FFA through autocatalytic hydrolysis of the oil, the moisture content of the oil must be reduced to 0.15 to 0.25 percent.

Re-heating the decanted oil in a cooking pot and carefully skimming off the dried oil from any engrained dirt removes any residual moisture. Continuous clarifiers consist of three compartments to treat the crude mixture, dry decanted oil and hold finished oil in an outer shell as a heat exchanger.

 

Storage, Handling and Transportation of Palm Oil Products

 The system and regulations applied on handling, storage and transport of palm oil products in Malaysia in.

1.  Scope
   Applies to the handling, land transport and storage of products from palm and palm kernel including OPS, FFB, PK, PKC, crude and processed PO and crude processed PKO.
   
   
2. Oil Palm Germinated Seeds
   
   1. Pre-Transportation Handling
   2. Transportation
      
      
3. Fresh Fruit Bunches (FFB)
   1. Post Harvesting Handling
   2. Transport of FFB to the Mil
   3. Handling of FFB at the Palm Oil Mill
      
      
4. Palm Kernel
   
   1. Handling and storage
   2. Transportation
      
      
5. Palm Kernel Cake
   
   1. Storage at warehouse
   2. Transportation
      
      
6. Palm Oil, Palm Kernel Oil And Their Product
   
   1. Storage and handling
   2. Operations
   3. Transportation of palm oil and palm kernel oil in lorry tankers