Construction should begin in August, with at least one coastal refinery that can process 200,000 barrels a day scheduled to be operational by the end of 2010.
 
The project also involves the building of a 320 kilometre pipeline from Kedah to northeastern Kelantan state.
 
The pipeline would allow Middle East oil shipments to reach the South China Sea without traveling through the Malacca Strait off peninsular Malaysia's west coast.
 
The strait is shared by Malaysia, Indonesia and Singapore and is notorious for robberies and kidnappings by pirates, although increased patrols have seen attacks fall in recent years.
 
According to the plan, the crude oil will be moored off Kedah, refined and then be transmitted through pipelines to Kelantan where it will be loaded on to tankers. to be shipped to South Korea, China and Japan, bypassing Singapore.