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
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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
- Project details
- Parent company
- Technical specifications
- Environmental technology
- Gas supply
- Employment
- Timeline
- Key signatories
- Data quality notes
- Sources
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
- Hanwa Co. Ltd (Japan) — Hanwa announcement, October 2024
- OCBC Bank (Singapore)
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:
- iron ore concentration plant
- pelletizing plant
- HBI plant
- dry-bulk jetty (20 metres water depth)
- support facilities
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:
- steelmaking facilities
- steel rolling mills
- high-end steel processing
- waste recycling
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:
- Datuk Seri Abdul Rahman Dahlan, Chairman
- Datuk Harun Ismail, Managing Director and CEO
Esteel Sabah:
- Xu Yihang, Managing Director
- Eng Shao Wei, Director
Witnessed by: Datuk Seri Hajiji Noor, Chief Minister of Sabah
Gas supply agreement (28 February 2025)
SEC:
- Datuk Adzmir Abd Rahman, CEO
Petronas (MPM):
- Datuk Ir. Bacho Pilong, Senior Vice President
Esteel Sabah:
- Xu Yihang, Managing Director
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:
- changes in technical design and scope of work
- cost estimations finalised after detailed technical studies
- currency exchange rate fluctuations
- rising construction material prices
- growing costs of new technologies
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
- MIDA, Green Steel Project in Sabah to draw close to RM20bil in total investment, 3 December 2022
- MIDA, Hajiji: Sabah’s first green steel project expected to take off by end 2024, 6 February 2024
- Bernama, Sabah Set To Fully Adopt Green Technology With RM20 Bln Green Steel Project, 9 January 2024
- Sabah State Government official document (undated)
News sources
- Daily Express, Mega RM19 billion green steel plant, 1 December 2022
- Borneo Post, Green Steel Project to be built in Sipitang, 30 November 2022
- The Star, RM20bil green steel project complements Sabah’s green tech aspirations, 9 January 2024
- Malay Mail, Hajiji: Sabah’s first green steel project expected to take off by end 2024, 9 January 2024
- Free Malaysia Today, Sabah adopts green tech with RM20bil green steel project, 9 January 2024
- Free Malaysia Today, Sabah denies Umno man’s claim steel firm delaying RM19bil project, 21 February 2025
- The Vibes, Sabah Energy Corporation signs major gas supply deal with Petronas, 28 February 2025
- Warta Oriental, SEC inks deal with PETRONAS to supply 150 MMscfd natural gas to Esteel, 28 February 2025
- The Edge Malaysia, Green Esteel to emerge as controlling shareholder of Southern Steel, 29 October 2024
- The Edge Malaysia, Singapore’s Green Esteel emerges as Southern Steel’s new controlling shareholder, 16 January 2025
- The Edge Malaysia, Esteel’s RM31b three-phase project marks major economic milestone for Sabah, 30 May 2025
- The Edge Malaysia, Esteel’s investment reflects confidence in Sabah’s economy, 7 July 2025
- The Edge Malaysia, Lifelines of growth in Sabah’s energy future, 2025
- Daily Express, 12,795 jobs for Sabahans soon, 21 November 2024
- Daily Express, Esteel’s investment increased to RM31 billion: Phoong, 8 July 2025
- Borneo Post, Esteel making progress in SOGIP investment, 19 November 2024
- Borneo Post, Esteel’s RM31 bln project major economic milestone for Sabah – Hajiji, 30 May 2025
- Borneo Post, Sipitang steel plant to show progress by July, 13 June 2025
- Borneo Post, Esteel’s green steel investment on track, physical works underway, 7 July 2025
Industry sources
- SEAISI, Esteel Sabah to invest to build green steel plant in Malaysia, 2022
- SEAISI, Green Esteel to emerge as controlling shareholder of Southern Steel, 2024
- Malaysia Steel Institute, The Steel Noticeboard, November 2022
- Malaysia Steel Institute, The Steel Noticeboard, December 2023
- Maybank Investment Bank, Weekly Report Issue #70, 5 February 2024
- Hanwa Co. Ltd, Notice Concerning Investment in Green Esteel Pte. Ltd., October 2024
- Lux Metal, Malaysia’s Green Steel Revolution, 9 March 2025
- IndexBox, Malaysia Unveils Groundbreaking HBI Project in Sabah, 13 June 2025
Documents provided for this report
- Daily Express print edition, 24 October 2025
- Malaysia Steel Institute, The Steel Noticeboard (PDF), November 2022
- Malaysia Steel Institute, The Steel Noticeboard (PDF), December 2023
- Maybank Investment Bank, Weekly Report Issue #70 (PDF), 5 February 2024
- Sabah State Government official document (PDF extract)