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Pengerang Terminal is only the beginning..

The terminal, which is now complete, was constructed in three stages
The terminal, which is now complete, was constructed in three stages

Pengerang Independent Terminals (PITSB) has high ambitions to be the catalyst for the development of a refining and petrochemical hub in Pengerang, with the potential to turn the region into a world-class oil and trading hub.

Located in a prime position within one of the busiest shipping lanes serving the Middle East and Asia, the facility has a total storage capacity of 1.3 million m3 following a three-phased construction project. The facility sits atop 150 acres of reclaimed sea-bed and is Southeast Asia’s first independent land-based crude oil storage facility with berthing facilities and a draft of 24 meters, capable of handling Very Large Crude Carriers (VLCCs).

Following the successful completion of the first phase in April 2014, Prime Minister Dato’ Sri Najib Tun Razak expressed hope that the facility will act as a catalyst for further development. The facility will serve an emerging and growing demand for independent storage triggered by increasing crude oil and petroleum product import flows into Asia and Australia.

Complex construction
Law Say Huat, CEO, at the terminal explains that the biggest challenge of the entire project was the size and complexities surrounding construction.

‘The biggest challenge of building this project was the sheer size and complexity due to its location and surroundings as well as the volume of construction activities, the interfaces and dependencies of the various construction scope elements and human resources.

‘However we were able to complete all three stages of phase one on schedule.’ Construction of the last phase, phase 1c, was complete in March 2015, and the terminal received its first VLCC – the MT Mesdar – days later.

Alluring location
The deep waters of the Pengrang harbour cemented the region as a prime location for significant amounts of storage capacity. The size of vessels used to transport products continue to grow and VLCCs are becoming a regular transport vessel on the shipping highways.

The site has a natural deep water harbour with a draft of 24 meters that is protected from monsoons throughout the year.

‘PITSB is offering the first independent land-based crude oil storage in the region together with direct VLCC berthing capabilities,’ says

‘In addition, it is located in a strategic and prime location with one of the busiest shipping lanes between the Middle East and Asia. It is also within the vicinity of one of the global refining, trading and storage centres. PITSB will complement the existing storage terminals in Singapore, marking a major step in our development in Southeast Asia.’

Elevating its strategic status, additional developments including more oil and LNG storage have been announced.

In December 2014, another terminal project was announced, which involves the construction and operation of an additional 2.1 million m3 industrial terminal and a deepwater jetty with 12 berths. This project, which will be built on 157 acres of land next to the current facility, will be a dedicated industrial terminal for the RAPID refinery complex. This project will have dedicated pipeline connections and infrastructure facilities for the storage, handling, and distribution of crude oil, petroleum products, chemicals and refinery complex.

This project will have dedicated pipeline connections and infrastructure facilities for the storage, handling, and distribution of crude oil, petroleum products, chemicals and LPG as feedstock as well as all the end products of the RAPID complex. Both the refinery and the industrial terminal are expected to be ready by early 2019.

Additionally, Dialog has also entered into a joint agreement with Petronas Gas for the development of a regasificiation facility including a regasification unit and two tanks of 200,000 m3 storage capacity. The gas can be injected into the Peninsular Gas Utilisation pipeline system.

Linking the global chain
Significantly, in May, the terminal was included in Platts FOB Singapore pricing assessment for middle distillates and petrol – a move which is expected to boost interest in the terminal.

Subsequently in July the terminal was then included in Platts FOB Straits pricing. These accreditations will also offer more flexibility to traders as well as improve market liquidity.

‘This puts Pengerang on par with the rest of the Singapore terminals in terms of trading via the Platt’s window,’ says Law.

‘If you look at Pengerang, it has proven itself to be well-positioned to service the Southeast Asia region. Pengerang terminal differentiates itself from other terminals in Johor by being a 100% independent service provider.

‘Our business is based on long-term global developments based on where product flows are required, where we need to have our network of terminals and how we can operate efficiently.’

The terminal, which is now complete, was constructed in three stages