Dialog: Cheap crude driving up demand for storage facility- The Star Online

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KOTA TINGGI: Dialog Group Bhd, the lead joint-venture partner in a huge land-based crude oil storage facility in Pengerang, Johor, said that cheap crude oil prices on the international market are driving up demand for storage facility.“We are seeing a surge in demand for storage since the price of crude oil started to decline late last year,” Dialog executive chairman Tan Sri Dr Ngau Boon Keat said.Ngau was speaking to reporters after a ceremony to welcome the 333m-long vessel MT Mesdar, the first very large crude carrier (VLCC) to dock at the Pengerang jetty.Ngau, who is also the chairman of Pengerang Independent Terminal Sdn Bhd (PITSB), said its terminals had received 128 vessels since April last year and expected 200 vessels by the year-end.The Pengerang project is a deepwater terminal development on 500 acres of reclaimed seabed land.Phase 1 of the Pengerang Deepwater Terminal project, a joint venture between Dialog (46%), Royal Vopak (44%) and State Secretary, Johor Inc (10%), commenced operations in the second quarter of 2014.The first phase, costing RM2bil, has a storage capacity of about 1.3 million cu m together with six deepwater berths with the capability to handle the storage, blending and distribution of crude oil, petroleum, chemical and petrochemical feedstock, products and by-products.“With Asia being a growing demand area for crude and crude travelling longer distances, we are glad to see our crude storage facility and VLCC berth at Pengerang are of value to our customers,” Vopak Asia division president Patrick van der Voort said in a statement yesterday.As South-East Asia’s first independent land-based storage facility for crude, Pengerang Independent Terminal – with a depth of 24m – is equipped with deepwater facilities, capable of handling VLCCs.The entire development will take another 10 to 15 years to be fully completed.Dialog is currently investing in the second phase of the project, which involves the construction of storage capacity of about 2.1 million cu m and a deepwater jetty with 12 berths at an approximate total project cost of RM6.3bil.Dialog is also currently investing in the Pengerang LNG project for the development of LNG regasification facilities comprising a regasification unit and two units of 200,000 cu m LNG storage tanks with an initial send-out capacity of 3.5 million tonnes per year (equivalent to about 490 million standard cu ft per day of natural gas) at a total estimated project cost of about RM2.7bil.