sabah

E-Steel Sabah Green Steel Project

This report provides an overview of the E-Steel Sabah green steel project at the Sipitang Oil and Gas Industrial Park (SOGIP) in Sabah, Malaysia.

Disclaimer

This report is compiled from publicly available sources including official government statements, news reports, and industry publications.

Investment figures, timelines, and project specifications have evolved over the project's development period from 2022 to 2025. The Data quality notes section documents known discrepancies and their explanations.

Readers should verify critical information with official sources before relying on it for decision-making. This report does not constitute investment advice.

Last updated: December 2025

Contents

Overview

E-Steel Sabah is a green steel manufacturing project at the Sipitang Oil and Gas Industrial Park (SOGIP) in Sabah, Malaysia.

The project is developed by Esteel Enterprise Sabah Sdn Bhd, a wholly-owned subsidiary of Singapore-based Green Esteel Pte Ltd. Phase 1 was officially launched on 30 May 2025 by Prime Minister Datuk Seri Anwar Ibrahim.

The facility will produce hot briquetted iron (HBI) and direct reduced iron (DRI) using natural gas instead of coal, reducing carbon emissions by approximately 70% compared to conventional steelmaking.

Project details

Item Detail
Project company Esteel Enterprise Sabah Sdn Bhd
Parent company Green Esteel Pte Ltd (Singapore)
Controlling shareholder You Zhenhua
Location SOGIP, Sipitang, Sabah
Total investment RM31 billion
Project structure Three phases
EPC contractor China Communications Construction Company (CCCC)
Phase 1 launch date 30 May 2025
Phase 1 expected completion Q4 2027

Sources: The Edge Malaysia, 30 May 2025; Daily Express, 8 July 2025

Parent company

Green Esteel Pte Ltd was incorporated in Singapore in 2017. The company is controlled by You Zhenhua, a Singaporean citizen.

Subsidiaries

Company Location Activity
Esteel Enterprise Sabah Sdn Bhd Sabah, Malaysia Green steel project
Antara Steel Mills Sdn Bhd Labuan, Malaysia HBI production (800,000 tonnes per year)
Southern Steel Bhd Penang, Malaysia Steel manufacturing (50.1% stake acquired January 2025)
BRC Asia Ltd Singapore Steel reinforcement fabrication (61.16% stake)
Eden Flame Sdn Bhd Malaysia Steel products

Investors

Sources: SEAISI; The Edge Malaysia, 16 January 2025

Technical specifications

Phase 1

Item Detail
Product Hot briquetted iron (HBI)
Production capacity 2.5 million tonnes per year
Land area 180 hectares (446 acres)
Investment US$1.93 billion (approximately RM9 billion)

Phase 1 facilities include:

Phases 2 and 3

Item Detail
Product Direct reduced iron (DRI)
Production capacity 2.5 million tonnes per year per line

Later phases will add:

Total production capacity

The project will have a combined production capacity of 7.5 million tonnes per year across all three phases.

Sources: MIDA, December 2022; Warta Oriental, 28 February 2025

Environmental technology

The plant uses natural gas as a reducing agent instead of coke and coal. This approach reduces carbon emissions by approximately 70% compared to conventional steelmaking methods.

Future plans include transitioning to green hydrogen smelting to achieve near-zero carbon emissions.

Source: MIDA, December 2022

Gas supply

Sabah Energy Corporation (SEC) and Petronas supply natural gas to the project under a 20-year agreement signed on 28 February 2025.

Item Detail
Steel manufacturing 100 mmscfd
Power generation 50 mmscfd
Total 150 mmscfd
Annual value Approximately RM1 billion
Contract duration 20 years

Source: The Vibes, 28 February 2025

Employment

Category Jobs
Phase 1 construction 10,000
Phase 1 operations 2,795

The Sabah State Government requires foreign investors to employ a minimum of 80% Sabahan workers.

Sources: Daily Express, 21 November 2024; Warta Oriental, 28 February 2025

Timeline

Date Event
December 2021 Sabah-Petronas Commercial Collaboration Agreement signed
30 November 2022 Phase 1 land lease agreement signed
9 January 2024 Gas supply heads of agreement signed
November 2024 Environmental Impact Assessment approved
31 December 2024 Phases 2 and 3 land lease signed (RM35 million deposit paid)
24 January 2025 Foreign Manufacturing License issued
January 2025 Green Esteel acquires 50.1% stake in Southern Steel Bhd
28 February 2025 Gas supply agreement with SEC and Petronas signed
30 May 2025 CCCC appointed as EPC contractor for jetty construction
30 May 2025 Phase 1 officially launched by Prime Minister Anwar Ibrahim
July 2025 Physical site works commenced
Q4 2027 Phase 1 completion expected

Sources: Borneo Post, 7 July 2025; Free Malaysia Today, 21 February 2025

Key signatories

Land lease agreement (30 November 2022)

SOGDC:

Esteel Sabah:

Witnessed by: Datuk Seri Hajiji Noor, Chief Minister of Sabah

Gas supply agreement (28 February 2025)

SEC:

Petronas (MPM):

Esteel Sabah:

Witnessed by: Datuk Seri Hajiji Noor, Chief Minister of Sabah

Sources: MIDA, December 2022; Warta Oriental, 28 February 2025

Data quality notes

Project figures have evolved between 2022 and 2025. This section documents known changes and their explanations.

Total investment: RM19.6 billion to RM31 billion

The total investment increased from US$4.39 billion (RM19.6 billion) in 2022 to RM31 billion in 2025.

State Minister Datuk Phoong Jin Zhe explained the increase was due to:

Source: Daily Express, 8 July 2025

Phase 1 investment figures

Two figures appear in sources for Phase 1:

Figure Context Sources
US$1.93 billion (RM8.9–9 billion) Total Phase 1 investment Warta Oriental, The Vibes, Lux Metal
RM6.4 billion Figure cited at Phase 1 launch The Edge Malaysia, The Edge Malaysia

The RM6.4 billion figure likely represents a specific component such as the EPC contract value, rather than the total Phase 1 investment. The US$1.93 billion figure is more consistently cited across multiple sources.

Phase 1 operational jobs: 1,752 to 2,795

The original December 2022 announcement cited 1,752 operational jobs for Phase 1. From January 2024 onwards, all sources consistently cite 2,795.

The reason for this revision is not documented. The 2,795 figure is used in this report as it reflects current official statements.

Phase 1 completion date

Source date Expected completion
November 2022 Q4 2025
January 2024 2026
February 2025 Q4 2027

The timeline was revised as the project progressed through regulatory approvals, design changes, and contractor selection. The current expected completion is Q4 2027.

Number of project phases

The December 2022 announcement described a three-phase project. A May 2025 Borneo Post article referred to "four phases". However, the state minister and most 2025 sources continue to reference three phases. This report uses three phases as the official structure.

Sources

Official government and agency sources

News sources

Industry sources

Documents provided for this report