Costing an estimated $14 billion, the project would involve the construction of two oil refineries and a 320km pipeline linking Yan in Kedah to Bachok in Kelantan. While work on the oil refineries, it is suggested, could begin in August, the federal government has yet to make a decision on the proposed pipeline. Mr Razak said that the project is "primarily a commercial deal because they think they can transport the oil at a lower cost and avoid some of the risks. It's still at a discussion stage, nothing has been formalized yet." According to Kedah state officials, up to 70% of the total investment will come from foreign partners. China and Iran have indicated strong interest in taking part. Malaysia's SKS Ventures, which is controlled by Syed Mokhtar Al Bukhary, recently signed a $16- billion deal with Tehran to develop two gasfields in southern Iran, despite calls by the US and EU to boycott Iran over its controversial uranium-enrichment programme. Some analysts believe the pipeline may be partly politically motivated, as it will provide an alternative route for oil from Iran to bypass the Straits of Malacca if Washington-Tehran relations were to worsen and sanctions were imposed on all Iranian goods. Meanwhile others have also raised concerns over the issue of security, especially with the continued unrest in neighbouring Southern Thailand. Currently, nearly half of the global oil supply is shipped through the Straits of Malacca to major markets, including around 80% of China's supply.