Southeast Asia’s first independent crude-oil storage terminal starts operations in Malaysia
Southeast Asia's first independent crude-oil storage terminal has started operations in Malaysia. It received its first shipment of crude oil from the Middle East, around 2.3 million barrels.
The terminal was built by Pengerang Independent Terminals Sdn. Bhd., a joint venture between Malaysia's Dialog Group Bhd., Netherlands' Royal Vopak and the state government of Johor.
Pengerang is the proposed site for a future oil refinery which is part of the USD19 billion Refinery and Petrochemical Integrated Development (RAPID) complex project of state-owned oil and gas company Petronas. The current timeline is to finish mechanical completion of the oil refinery by the fourth quarter of 2017, but this project has experienced several delays already.
Singapore is Asia's largest oil-trading and refining hub and has a significant amount of storage capacity for petroleum products and its oil refineries keep a 15-day average crude oil inventory but it does not provide crude oil storage for commercial trading purposes. The Pengerang facility will be the first to offer crude oil storage facilities for large crude oil deliveries which can then be re-distributed around the region. Pengerang is located in southeast Johor, to the south of Desaru and adjacent to Singapore.
"We are optimistic about the long-term developments in the oil-storage market in the region, which is fueled by demand from fast-growing Asian economies and the growing imbalances between production and consumption areas," said a spokeswoman for Royal Vopak, the world's largest independent oil-storage company.
The launch of the facility comes at a time when global crude oil prices have declined by more than 50% since last year.