Malaysia-Singapore Oil Operations Could "Be Bigger than Rotterdam"

Johor Port, Malaysia, in the state where the PIDPT and RAPID projects are taking place.

A combination of Malaysia's upcoming Pengerang facility and Singapore's Jurong Island "can be bigger than Rotterdam," executive chairman Ngau Boon Keat of Dialog Group Berhad (Dialog) has told local Malaysian news service The Star.

Rather than compete, Ngau believes the facilities could work together by forming a hub like the Amsterdam, Rotterdam, Antwerp (ARA) region, currently the biggest oil refining centre in the world, which "complement each other in areas of refining capacity, independent storage and blending capacity as well as access to markets."

"We will complement Singapore. We can go into primary and secondary petrochemical products," said Ngau, adding that "to go into tertiary products, it would take us at least 10 to 15 years to catch up with Singapore."

The executive chairman also believes Singapore's development opportunities are constrained by its available land, adding "Singapore is not building refineries because it has limited land. Singapore's Jurong is full."

New Facilities

Pengerang, in Johor, Malaysia, is the location of choice for two new oil processing and storage facilities.

Pengerang Independent Deepwater Petroleum Terminal (PIDPT), a RM5 billion (US 1,56 billion) deepwater oil terminal, is a joint venture between Dialog, Rotterdam headquartered Royal Vopak N.V. (Vopak), and Johor state.

Dialog say water depths of 24 meters will facilitate the berthing of very large crude carriers (VLCCs) and in April Ngau said they were "on schedule" to begin operations at the start of 2014.

Pengerang's second project is state owned Petroliam Nasional Berhad's (Petronas') RM60 billion (US $18.73 billion) Refinery and Petrochemical Integrated Development (RAPID) which is expected to commence by mid 2013 and be operational some time in 2016.

When complete, the Fortune 500 oil company say RAPID will have a capacity to refine 300,000 barrels per day (bpd) and produce refined petroleum products including gasoline and diesel that meet the Euro 4 and Euro 5 fuel specifications.

The Kuala Lumpur-based business is also assessing the feasibility of developing a new liquefied natural gas (LNG) receiving and re-gasification terminal as part of RAPID.

Dialog's Ngau Boon Keat says Pengerang "has a greater potential than originally anticipated" and hopes PIDPT and RAPID will "draw hundreds of billions of oil and gas investments to south Johor.

"In 20 years, Pengerang itself could surpass Rotterdam."