Dialog LNG Sdn Bhd (“Dialog LNG”) and Pengerang LNG (Two) Sdn Bhd (“PLNG-2”) have on 14 November 2014 entered into a Shareholders’ Agreement (“SHA”) with PETRONAS Gas Berhad (“PGB”) for the development of Liquefied Natural Gas (“LNG”) regasification facilities comprising of a regasification unit and two (2) units of 200,000 m3 LNG storage tanks with an initial send out capacity of 3.5 million tonnes per annum (“MTPA”)(equivalent to approximately 490 million standard cubic feet per day (“MMscfd”) of natural gas at Pengerang, Southern Johor, Malaysia (“Pengerang LNG Project”).

The total estimated project cost of the Pengerang LNG Project is approximately RM2.7 billion. Pengerang LNG (Two) Sdn Bhd (“PLNG-2”), a special purpose vehicle which is currently wholly owned by DIALOG LNG, will undertake the Pengerang LNG Project. PLNG-2 will be restructured whereby PGB will acquire 65% in PLNG-2 with Dialog LNG to hold 25% and the State Secretary, Johor (Incorporated) (“SSI, Johor”) to hold the remaining 10%.

The Pengerang LNG Project is part of another development phase of the Pengerang Terminal at Pengerang, State of Johor where DIALOG, through its other wholly owned subsidiary, Dialog Pengerang Sdn Bhd has been granted the land rights and development rights by the State Government of Johor Darul Takzim and SSI, Johor under a Development Cum Joint Venture Agreement dated 13 May 2011. The Pengerang LNG Project will be developed on reclaimed land located within the Pengerang Terminal where the land reclamation for the Pengerang LNG Project has been completed by DIALOG.

The Pengerang Terminal is being developed on contiguous onshore and seabed land located between Tanjung Ayam and Tanjung Kapal, Pengerang, State of Johor, with deepwater jetty facility with water depth of up to 24 meters capable of handling Very Large Crude Carriers. Upon completion, the Pengerang Terminal will be able to handle the bulk breaking and bulk-building activities for crude oil, petroleum products and LNG. The Pengerang Terminal has the potential to become a regional oil and gas hub owing to its strategic location close to one of the busiest international shipping lanes and close proximity to Singapore.

Phase 1 of the Pengerang Terminal which is owned by Pengerang Independent Terminals Sdn Bhd, a joint venture between DIALOG (46%), Koninklijke Vopak N.V. (44%) and SSI, Johor (10%), had commenced operations in Q2 2014. Phase 1 involves the construction of an initial storage capacity of approximately 1.3 million cubic metres (m³) together with six deepwater berths at a cost of RM2.0 billion with the capability to handle the storage, blending and distribution of crude oil, petroleum, chemical and petrochemical feedstock, products and by-products.