Dialog executive chairman Ngau Boon Keat told StarBiz that natural deepwater and strategic location of Pengerang had attracted the attention of potential oil and gas investors from Taiwan and other countries recently.

“Pengerang has the potential to be bigger than what we anticipated originally. If done properly, the petrochemical industry in Pengerang and Singapore’s Jurong Island (combined) can be bigger than Rotterdam in the Netherlands. In 20 years, Pengerang itself could surpass Rotterdam,” said Ngau.

To recap, in Pengerang, Dialog, together with Netherlands-based Royal Vopak group, are developing an independent deepwater petroleum terminal. The independent deepwater petroleum terminal will provide storage, blending and distribution services for oil products and will be capable of handling ultra large crude oil carriers.

The Pengerang terminal, to be completed in the next six years, is presently planned with a total storage capacity of five million cu m covering 500 acres reclaimed land.

According to Ngau, the Pengerang terminal has the advantages of having deepwater (24m) jetty facilties and a strategic location that is next to international sea lanes. The Johor state government also has a 10% stake, via its investment arm the State Secretary Johor Inc, in the terminal project. 

Ngau reiterated that Pengerang has natural resources and advantages that Singapore and Rotterdam lack. According to Pemandu’s (Performance Management and Delivery Unit) handbook on the Economic Transformation Programme (ETP), the Pengerang terminal is expected to generate RM1.6bil in gross national income (GNI) by 2020 through three streams.

“First, independent logistic players will charge storage fees, generating RM500mil in additional GNI. Second, the availability of storage will drive additional shipping volumes, generating an expected RM300mil in GNI. Lastly, trading of crude oil and petroleum products is expected to generate an additional RM800million in GNI.”

“Together, Malaysia and Singapore could operate to form a hub like Amsterdam-Rotterdam-Antwerp (ARA), which complement each other in areas of refining capacity, independent storage and blending capacity as well as access to markets.”

The report also noted that in South-East Asia, Singapore has traditionally had a significant presence in the oil storage industry, with a total of 10 million barrels of independent storage capacity (capacity which is owned by third party operators and contracted out to oil companies, refiners and traders).

“In addition, by 2007, Singapore had built a significant trading business worth more than RM1 trillion in physical oil trade and RM2 trillion in derivative trade. In the last three years, Singapore has more than doubled its independent storage capacity with the commissioning of the Universal and Helios terminals, which are already operating at capacity.”