(EnergyAsia, September 18 2012, Tuesday) — Five months after starting construction of their oil storage project in the southern Malaysian state of Johor, engineering group Dialog and Dutch oil and chemical storage firm Royal Vopak are setting their sights on building a liquefied natural gas (LNG) terminal near the same location.

The proposed US$1.3 billion terminal was among a list of seven projects worth a total of RM5.607 billion announced by Malaysian Prime Minister Najib Tun Razak as part of the country’s Economic Transformation Programme. (US$1= RM3.05).

The LNG project will be part of the Pengerang Independent Deepwater Petroleum Terminal (PIDPT) that is being developed by a consortium owned by Malaysia’s Dialog, Vopak and the Johor state government. The same team is building Southeast Asia’s first independent crude oil storage terminal in the Pengerang area facing the South China Sea.

According to Prime Minister Najib, the Pengerang LNG terminal will store, load and regasify to support the import and re-export of LNG for the domestic and export markets.

“The terminal will be the first independent LNG trading terminal in Asia, allowing multiple LNG users to store and trade the product. This will spur the growth of the industry, and help establish Malaysia as Asia’s LNG trading hub,” he said.

The consortium will develop the project in two phases of 360,000 cubic metres each from 2013 to 2018. It expects to make the final investment decision by mid-2013.

Dialog has formed a 51/49 joint venture with Vopak that owns 90% of the company operating the PIDPT due to start up in 2014. The remaining 10% is held by the Johor state government.