(EnergyAsia, August 22 2012, Wednesday) — MISC Bhd, the Malaysian energy shipping firm, and Singapore’s jet fuel trader, China Aviation Oil (CAO), said they have terminated a shareholder agreement to jointly build and operate an oil storage tank terminal in the southern Malaysian state of Johor.
In separate statements, MISC, which owns and operates oil tankers as well as the world’s liquefied natural gas fleet, and CAO, Asia’s largest physical jet fuel trader, said the termination of the 2011 agreement was mutual as not all conditions were fulfilled within the required timeframe.
MISC’s 45%-owned unit Centralised Terminals Sdn Bhd (CTSB) held the majority stake of 76% in the proposed venture with 24%-shareholder CAO to build and operate the proposed 380,000-cubic metre terminal in Tanjung Langsat Port.
Malaysian engineering firm Dialog Group Bhd owns the remaining 55% stake in CTSB, which MISC said will continue to explore “suitable collaboration opportunities in the region” with CAO.
In a statement, the Singapore-listed company said the partners needed a longer concession period for the land to operate the terminal beyond the 30-year term granted by the Tanjung Langsat Port Sdn Bhd.
“As the entry into the concession agreement and lease would require a much longer period of time than envisaged, both CAO and CTSB have agreed to let the shareholders’ agreement lapse on August 20 2012 as it will no longer be commercially feasible to continue with the project,” said CAO.
Despite the cancellation of the Terminal Three Facility, Meng Fanqiu, CAO’s CEO, said his company is continuing to explore opportunities to lease or invest in storage facilities in Singapore, Malaysia and Indonesia that will include collaboration with CTSB.
“As Terminal Three Facility is a greenfield project which would have taken about two years to complete, the cessation of this project will not have any material impact on the current and future businesses or earnings of the CAO Group,” he added.
The company also holds a 26% stake in a storage terminal project in Yeosu in South Korea, that is due to start up next January.
Separately, the oil storage terminal at nearby Pengerang, also in Johor state, is on course to start up in January 2014 with current work on land reclamation and jetty construction proceeding on schedule.
Pengerang Terminals Sdn Bhd, jointly owned by Dialog Group, Dutch oil and chemical logistics company Vopak and the Johor state government, will initially build 1.284-million cubic metres of capacity for clean products and crude oil, with plans for another million cbm.
The terminal will start up with 432,000 cbm of clean products storage capacity and six berths in January 2014 that will be followed six months later by another 432,000 cbm of capacity. In January 2015, it will launch the third part of its first phase to store 420,000 cbm of crude oil, making this the first in Southeast Asia to offer independent storage for crude oil.