By Lee Wei Lian
KAMPUNG SUNGAI KAPAL, April 14 — The first phase of the Malaysia’s ambitious RM5 billion deepwater oil terminal in Pengerang, Johor is on schedule and will be operational by January 2014, Dialog group executive chairman Ngau Boon Keat said yesterday.
The project, which is expected to help propel south Johor into one of the world’s premier petrochemical hubs, was recently hit with a lawsuit that could threaten to suspend work, but Ngau said that progress on the terminal, which is currently at the land reclamation stage is continuing as planned.
A group comprising 578 fishermen filed the suit last week against Pengerang Independent Terminals Sdn Bhd (PITS), Dialog E&L Sdn Bhd and the Johor government over the terminal’s land reclamation works that they claimed affected their livelihood.
“We are on schedule,” Ngau said in a briefing to the media at the terminal’s construction site office.
Ngau said that he could not comment on the case as it was pending in court but noted that compensation rates for fishermen were determined by the state’s fisheries department.
“What they (the fisheries department) say we should pay, we will pay,” he said.
The disgruntled fishermen are seeking RM500,000 each due to loss of income and an injunction restraining the first and second defendants from continuing work until their demands are met.
The first phase of the project — which is officially known as the Pengerang Independent Deepwater Petroleum Terminal (PIDPT) — will involve the reclamation of 150 acres of land with a oil storage capacity of 1.3 million cubic meters and seven berths at a cost of RM1.9 billion.
Its location at the entrance of one of the world’s busiest shipping lanes and water depths of 24 meters which facilitate the berthing of very large crude carriers (VLCCs) are expected to help PIDPT become a major oil storage facility for oil traders.
The project is joint venture between Dialog, Dutch company Vopak and Johor state.
Dialog and Vopak hold a 49 and 51 per cent stake respectively in Pengerang Terminals Sdn Bhd.
Pengerang Terminals in turn holds a 90 per cent stake in Pengerang Independent Terminals Sdn Bhd, the operator of PIDPT, with Johor state holding the remaining 10 per cent.
PIDPT is also expected to support Petronas’ massive RM60 billion Refinery and Petrochemical Integrated Development (RAPID), also in Pengerang.
The RAPID project aims to tap the growing need for speciality chemicals and the demand for petroleum and commodity petrochemical products in the Asia Pacific region by 2016.
RAPID was also hit by protests last month by purportedly unhappy locals saying that it would pollute the environment and displace local villagers.
Ngau refuted the claims pointing out that neighbouring Singapore, which is known for its stringent environmental standards is also the world’s third largest oil refining centre.
He added that PIDPT and RAPID would help draw hundreds of billions of oil and gas investments to south Johor, creating many jobs and boosting the local economy.