(EnergyAsia, June 30 2014, Monday) — Two months after its start-up, Southeast Asia’s newest oil storage terminal built partly on reclaimed land on the eastern coast of Malaysia’s Johor state was officially launched last Thursday by Prime Minister Najib Abdul Razak.

In April, Pengerang Independent Terminals Sdn Bhd (PITSB) started up the RM5-billion project’s first phase on a 60-hectare plot within the Pengerang Integrated Petroleum Complex (PIPC) to store 432,000 cubic metres (cbm) of oil products. (US$1=RM3.2).

Located north of Singapore, PITSB is a joint venture between Malaysian engineering firm Dialog Group Berhad, Dutch oil and chemical logistics firm Royal Vopak, and the Johor government represented by the state-owned investment firm SSI.

PITSB chairman and Dialog exexcutive chairman Ngau Boon Keat hailed the event as an “historical moment” and “the realisation of a vision” conceived in 2009 to develop a world-class crude oil and petroleum products storage terminal in Pengerang, a fishing town facing the South China Sea.

“Our deepwater terminals can play a vital role as a catalyst for the development of a refining and petrochemical manufacturing hub in Pengerang. Both will transform Pengerang into a world class oil and gas hub for the region,” he said.

Vopak’s chairman and CEO Eelco Hoekstra said the terminal strengthens his company’s position as an independent storage operator in Southeast Asia.

“Together with our terminals in Singapore, PITSB will cater to the needs of our customers who are international oil companies, national oil companies and traders,” he said.

The terminal is part of a proposed US$11 billion investment in infrastructure projects to support the planned US$16 billion development of an integrated oil refinery and petrochemical complex known as RAPID under the Pengerang Integrated Complex (PIC) led by Malaysia’s state energy firm Petronas.

PIPC, which houses PIC, is aimed at making Johor into a competitor against Singapore as Asia’s main oil and gas hub.

On his Facebook posting, Prime Minister Najib said the PIPC project will play a key role in helping Malaysia become a high-income nation with a per capita income of US$15,000 by 2020.

“Such a target requires an annual increase in gross national income per capita of at least 6% a year. Our oil, gas and energy sector is one of the 12 growth areas identified to spearhead Malaysia’s rapid and on-track economic development,” he wrote.

Based on committed investment figures, he said the PIPC project will contribute RM18.3 billion to the nation’s gross national income and create 8,600 jobs by 2020 while attracting as much as RM170 billion in investments. (US$1=RM3.2).

Najib also mentioned Malaysia’s interest to develop an LNG terminal in Pengerang to serve both the domestic and export markets.

PITSB’s launch was attended by Johor state’s chief minister, Mohamed Khaled Nordin, Malaysian and Johor officials, and executives from the oil and gas industry.
Designed to store and handle both crude and oil products, PITSB has six berths including a deep-water jetty with a draft of up to 24 metres to accommodate Very Large Crude Carriers (VLCCs).

The project will be completed in three phases, with the start-up of an additional 432,000 cbm of storage for clean petroleum products in a second phase by the third quarter of 2014, and 420,000 cbm of crude oil storage in the final phase in the fourth quarter.

The completed terminal will be able to store and handle a total of 1.3 million cbm of crude and oil products.

Separately, French engineering giant Technip said it and US Fluor Engineering have jointly secured from Petronas a “substantial” programme management consultancy contract for RAPID. Petronas expects to build a 300,000 b/d oil refinery by 2019 to supply feedstock directly into petrochemical and chemical plants that are part of the RAPID project.

“The contract will include overall project and site management of the RAPID project and provision of project management services for specific engineering procurement construction commissioning (EPCC) packages within RAPID throughout the pre-award, engineering and procurement, construction and commissioning as well as warranty management and close-out phases,” it said.

PIC, which will be part of the overall PIPC project in Johor state, will include the development of power plants, an industrial water system, a liquefied natural gas (LNG) import terminal and other support facilities.

Petronas approved the final investment decision (FID) for PIC in April.