Trans-Peninsula Petroleum plans to build a 310-kilometre pipeline across northern Malaysia.

The pipeline would bypass the Malacca Strait, allowing oil tankers to be loaded with crude away from the busy and often dangerous waterway. Many similar projects have failed in the past.

The company"s partners are Saudi Arabia"s Al-Banader International and the Indonesian steel pipeline maker, PT Bakrie & Brothers.

It is intended the pipeline would run across northern Malaysia, allowing Middle Eastern oil to be refined in Kedah on the northwestern coast, piped to Kelantan on the eastern coast, where it would be shipped to Japan, China and South Korea.

Should the project be completed, then it would divert about 30% of the oil currently that goes through the Malacca Strait. About half of the world"s crude oil is shipped through the Malacca Strait, which is notorious for robberies and hijackings.

Signed at World Islamic Economic Forum

The deal was signed at the World Islamic Economic Forum in Kuala Lumpur.

Earlier in the day, Trans-Peninsula also signed deals with Malaysia"s Ranhill Engineers and Constructors and Indonesia"s PT Tripatra for the design and construction of the pipeline.

PIN/Radionz.co.nz