Construction of the terminal is expected to start in April.

“The terminal’s maximum capacity is 5 million cu m. The first phase is planned for about 1.3 million cu m,” a source familiar with the project told Platts Thursday.
The companies plan to construct 50 storage tanks to store clean products with a capacity of approximately 860,000 cu m, and another 10 tanks for dirty products with a storage capacity of about 440,000 cu m.
Dialog had earlier said that the first stage of the three-phase project will be completed by late 2013 or early 2014, and the entire project by 2017.
When completed, the terminal and its port facilities will be managed and operated by Vopak.
Many oil companies have been approached by Dialog and Vopak regarding leasing of storage at the terminal and the response so far has been positive, the source said.
“Demand for clean tankage is stronger than for dirty now,” said a trader based in Singapore.
Dialog has a 51% stake in the project while the Johor state government, which has given a 60-year lease on land for the development of the terminal, has a 10% interest. Vopak holds all the remaining stake.
The planned facilities will have a water depth of up to 26 meters and will be capable of handling ultra large crude carriers, VLCCs and other vessels, Platts reported previously. It will also have tankage facilities for the handling, storage, processing and distribution of crude oil, petroleum, petrochemicals and chemical products.
The Pengerang region is located at the southern tip of Johor state, close to international shipping routes and Singapore’s international petroleum hub.
The Pengereang terminal will offer much-needed storage in the area. Leaseholders have been reluctant to give up storage space in Singapore, the oil trading hub in Asia, which has an estimated onshore storage capacity of around 135 million barrels or 21.5 million cu m. Singapore refiners, with a combined topping capacity of about 1.3 million b/d between them, hold about 65% of the total storage space, and retain it for captive use. The remainder is held by independent tank operators like Helios, Horizon, Oiltanking, Vopak and Universal, who lease the facilities to trading companies. Most of the petroleum and petrochemical storage facilities are housed on Jurong Island, home to some 80 petroleum and petrochemicals companies. As the Singapore government would not release more land for the construction of new terminals on Jurong Island, companies have had to look at projects in Malaysia’s Johor state and Indonesia’s Batam island, both close to Singapore. Apart from the Pengerang project, Vitol is planning to jointly build an oil storage terminal at Tanjung Bin in southern Malaysia with Malaysian shipping group MISC.
Hong Kong-listed Chinese oil trader and storage and jetty operator Sinopec Kantons is also looking to develop an oil terminal complex on Indonesia’s Batam island. It is expected to form a joint venture with Indonesia’s Mas Capital Trust to build and operate a 2.6 million cu m oil storage complex and supporting facilities, with an initial investment of about $815 million.