Bintulu and Kemaman: a tale of two ports

Bintulu demonstrates what sustained investment in a strategic port can do for a region, while Kemaman has been dormant and wasteful for many years.

The return of Bintulu Port to Sarawak after years of negotiations is more than a change in ownership. It raises a much bigger question about how Malaysia plans, funds and develops its strategic ports—and whether the same principles are being applied fairly across the country.

From Sept 1, Bintulu Port is officially under the ownership and management of the Sarawak government, following a negotiated agreement with Putrajaya.

The question that naturally follows is this: if Sarawak can take greater control of Bintulu Port, should other states also be given greater control over strategically important ports located within their territories?

The issue is not simply about who owns a port.

It is about who makes the decisions, who provides the money and, ultimately, who benefits from the economic development that the port generates.

The comparison between Bintulu Port in Sarawak and Kemaman Port in Terengganu is particularly revealing.

Bintulu not any port

Bintulu’s development shows what can happen when port development is closely integrated with a state’s natural resources and industrial ambitions.

Built in 1978, with the Bintulu Port Authority established in 1981 and operations commencing two years later, its development has been closely tied to the discovery and exploitation of offshore oil and gas resources in the Luconia Basin, off the coast of Sarawak.

The development of the liquefied natural gas (LNG) industry within the port transformed Bintulu. Gas was brought ashore to feed the LNG facilities, and the LNG export terminal became the foundation for a much larger industrial economy.

The port did not remain a simple facility for loading and unloading cargo. It expanded to handle liquid bulk, dry bulk and containerised cargo.

Industries developed around it. Infrastructure followed. The hinterland expanded. The township grew.

Today, Bintulu Port is one of Sarawak’s most important economic assets, handling around 52 million tonnes of cargo in 2025. This serves as an important lesson.

A port is not merely a maritime facility. It can be the economic foundation upon which an entire industrial region is built, giving employment to practically everyone in the district.

Kemaman, another sleepy hollow

Kemaman, too, has a remarkable story.

The port was originally developed by the Terengganu state government in 1978, about the same time that the federal government planned Bintulu Port.

As a supply base (another name for an oil and gas port) serving Terengganu offshore, it took over the roles of the Loyang supply base in Singapore.

The state’s intention was to support the emerging oil and gas industry, with the objective of turning it into a one-stop centre for the oil and gas development in the South China Sea.

It didn’t go down that route as the federal government had other ideas and different ambitions for the area. Perwaja, the national iron and steel project, was located there instead.

A large tract of land that would have been more suitable for an oil and gas terminal (Penggerang, Johor eventually took over that role) was allocated to the steel mill, together with a dedicated iron ore import handling facility called the East Wharf.

With the harbour depth dredged to –18 metres, Kemaman Port became the deepest port in Malaysia at the time. Super large bulk carriers brought in iron ores from as far as Brazil and Canada. The sleepy Chukai town transformed into a crew recreational centre.

By 1991, the federal government had sunk so much investment into Kemaman Port that it had no option but to take over the management via the Kemaman Port Authority. That’s how the state port became a federal port.

But the iron ore hype didn’t last very long. Somehow, the steel making industry failed to take off. Soon after, the grand steel mill and the large East Wharf became idle, not for a couple of years but a couple of decades, before China steel came into the picture.

The harbour basin, once boasting a water depth of 18 metres, was bereft of large ore carriers. What remained were only offshore supply vessels, anchor-handling tugs, and the occasional offshore survey vessel—each requiring no more than six metres of depth.

The Scale Gap: Kemaman vs. Bintulu

Terengganu’s 5% oil royalty

Putrajaya may have national responsibilities, but it should not assume that a centralised decision made in their glass houses is automatically the best decision for every region or state. The era of “the government knows best” should be over.

The government should listen more, devolve more, and allow states to take greater responsibility for their own economic future.

But devolution without money is meaningless. You cannot tell a state to develop its own economy while withholding the financial resources that would allow it to do so.

This is why the 5% oil royalty payment matters. Terengganu should receive what it is legitimately entitled to under the oil royalty agreement—like Sabah and Sarawak, Malaysia’s other two oil and gas producing regions.

And rather than allowing the issue to remain a perpetual political dispute, the federal government should resolve it decisively. If the 5% is due, pay it.

Then let Terengganu decide how best to use part of that revenue to strengthen its productive economic base. Kemaman Port would be an obvious candidate. The state could invest in port facilities, industrial land, logistics infrastructure and supporting utilities, once the funds are available.

The federal government can continue doing what it does best: providing national infrastructure such as the East Coast Expressway (LPT1) and East Coast Rail Link (ECRL) and ensuring national connectivity.

As of now, the ECRL spur line to Kemaman Port still only exists on paper; construction has not even started while the main line for passengers services is starting in January 2027.

Malaysia cannot seriously talk about balanced regional development while economic decision-making and financial resources remain heavily concentrated in Putrajaya.

Bintulu shows how sustained investment in a strategic port can transform a region. Kemaman, by contrast, has languished—remaining dormant and wasteful for many years.

What it needs is the financial capacity and the freedom to develop them properly.

The federal government has already recognised Bintulu’s strategic importance and devolved its ownership back to the state. It should now recognise Kemaman’s and do the same.

The question of whether the current state government is capable or competent enough, is a story for another day. In fact, the mistakes and errors of the past came from the same Putrajaya; so the pot can’t be calling a kettle black.

Denying Terengganu its rightful 5% oil royalty—resources that belong to its people—and preventing the state from deciding how best to harness them for future economic growth amounts to gross negligence on Putrajaya’s part.

If the federal government believes in fair federalism, it should honour that commitment.

Let Terengganu invest the funds. Let Kemaman Port grow rather than choke it. Let investors decide whether the port is commercially viable.

And let the state, rather than Putrajaya, take greater responsibility for making it happen.

Bintulu has been given that opportunity. Kemaman deserves no less.

The views expressed are those of the writer and do not necessarily reflect those of FMT.