* Pengerang's $600 mln oil storage terminal to start
operations on Sat
* To boost southern Malaysia's capacity by 70 pct
* First commercial crude storage to be ready by December
By Jane Xie
SINGAPORE, April 11 Malaysia's biggest
commercial oil storage facility will start operations on
Saturday when it receives its first fuel shipment, expanding
Southeast Asia's share in the oil storage business and also
raising competition with neighbouring Singapore.
The $600 million oil storage terminal with a capacity of
1.28 million cubic meters at Pengerang in the southern Malaysian
state of Johor will receive a clean oil product shipment on
Saturday morning, Dialog Group Bhd, one of the owners
of the terminal, confirmed to Reuters in an email.
Singapore is the 800-pound gorilla in the regional oil
storage business, boasting a capacity of around 20 million cubic
meters of storage space that is essential for oil trading
activities. A scarcity of land, however, has stymied the
city-state's growth of the business.
So Malaysia is cashing in on the opportunities provided by
the rising quantities of crude oil and products passing through
the region to meet the appetite of Asia's growing economies.
The Pengerang terminal, majority owned by a 51:49 joint
venture of Dialog and Dutch oil and chemicals storage company
Vopak, will boost southern Malaysia's oil storage
capacity by nearly 70 percent to more than 3 million cubic
metres when its first phase is completed by year-end.
It will also become then the first commercial oil terminal
in the region to offer crude oil storage.
It was not immediately clear what fuel the shipment will
bring on Saturday or what the quantities are and who's leasing
the storage space.
Malaysia also has oil storage terminals at Tanjung Bin,
Tanjung Langsat and Pasir Gudang.
Twenty-five storage tanks at Pengerang with a combined
capacity of 432,000 cubic meters that can store clean oil
products such as naphtha and diesel will be brought online at
Saturday's commencement. Another 432,000 cubic meters is set to
be commissioned by June and a further 420,000 cubic meters by
December, an industry source familiar with the matter said.
When the first stage is completed, the project will offer 57
tanks and six berths. It will have capabilities to dock a very
large crude carrier.
Two-thirds of the terminal's capacity will be designated to
store clean products and the remaining for crude oil.
Subject to demand for more storage, there are also plans to
expand Pengerang's storage capacity to up to 5 million cubic
The storage terminal is one of several upcoming energy
projects in Pengerang.
Malaysia's state oil firm Petronas will build a
300,000 barrels-per-day refinery and petrochemical integrated
development which costs about $16 billion at Pengerang. The
refinery is expected to start operations by early 2019.
And in November, Singapore-based oil trader Concord Energy
said it had signed a pact with Dialog for a feasibility study to
build another terminal there with a capacity of up to 2 million
(Editing by Muralikumar Anantharaman)