OREANDA-NEWS. July 28, 2011. China Petrochemical Corp. and two partners said they plan to develop a “marginal” oil field off the coast of Terengganu in Malaysia.

China Petrochemical, or Sinopec Group, will hold 40 percent of the project and invest between USD 400 million and USD 700 million, according to a joint statement from the companies released in Kuala Lumpur. The partners are International Oil Design & Construction Sdn. and Sabio Technology Sdn.

Malaysia is offering financial incentives such as investment tax allowances and lower taxes to encourage the development of less-profitable fields. The government is counting on these fields to help boost production in the nation, the second-largest oil and gas producer in Southeast Asia, as energy demand rises.

“Oil and gas has been identified as a key sector to help engineer the transformation of our economy,” Mustapa Mohamed, minister of international trade and industry in Malaysia, said after witnessing an agreement signing with the companies in Kuala Lumpur today.

Malaysia, the world’s second-largest exporter of liquefied natural gas, agreed to buy 1.5 million metric tons of LNG annually from Qatar Liquefied Gas Co. for at least 20 years starting in 2013.