Kuantan Port Consortium Sdn Bhd, a unit of IJM Corp. Bhd, and NewOcean Energy (M) Sdn Bhd, a subsidiary of Hong Kong-listed NewOcean Energy Holdings Ltd., have signed agreements to develop an oil refinery complex at Kuantan Port, Malaysia.

Under the agreements, NewOcean would develop, build, own and operate an oil refinery complex and tank farm on a 9.71-hectare site at an estimated cost of MYR5.1 billion (USD1.22 billion).

This project would reinforce Kuantan Port’s position as a major regional shipping gateway in Asia-Pacific, according to Datuk Soam Heng Choon, IJM chief executive officer and managing director.

“The refinery project is also expected to promote Kuantan Port and the downstream petrochemical industry through the import and export of liquid and containerized cargoes as well as the transit of commodities in the East Coast Economic Region,” he said.

The oil refinery will have an annual production capacity of 3.5 million tonnes. The oil refinery, which will use Kuantan Port’s existing and new berths, will be developed over two phases. The first phase will be completed within 24 months. The second phase will take 18 months.

Construction of the oil refinery complex is expected to start upon receipt of approvals from relevant authorities.