Dialog Group Bhd, the country’s second-biggest oil and gas services provider, said it has signed some customers for the RM1.9bil storage terminal, it is developing with Royal Vopak NV.
Talks with other potential customers were continuing, Dialog managing director Ngau Boon Keat said in an interview at Pengerang in Johor.
Dialog, Vopak and the Johor government are developing the site at Pengerang, with initial capacity of 1.3 million cu m, to meet rising demand for oil storage in Asia and as space in Singapore dwindles. The companies were betting on the terminal’s location to capture trade flow between China, India and Asia, Ngau said at the site.
“Our location is blessed with 24-m deep natural berth able to bring in very large crude carriers,” said Law Say Huat, chief executive officer of the venture developing the Pengerang terminal.
“We are offering an alternative to the crude oil traders, refiners, or the suppliers to be able to bring here to blend up, to break bulk or to make bulk.”
The tanks would be for clean products and crude oil and would begin operating from 2014, Ngau said.
Clean products include fuels such as gasoline, naphtha, diesel and kerosene. The company has no immediate plans to build fuel oil tanks.
“At the moment, there is quite a lot fuel oil storage,” Ngau said. “We’re more targeting crude oil storage.”
The project would help drive annual profit growth at Dialog by more than 20% in the next few years, Ngau said. Earnings would also be supported by ventures to provide services to oil and gas explorers, he said.