Malaysian multi-products oil hub to be ready by August 2011

09 April 2010 , By Port World

Malaysia's oil depot project on a reclaimed island off the port of Tanjung Pelepas is expected to start operations in August 2011, after construction work first started in July 2007, according to the head official of the project developer and operator.

''We expect operations to start around August next year, and the project is 61% completed,'' said Abdul Rashid Mohd Isa Al-Qadiry, executive chairman of Asia Petroleum Hub (APH).

Initial plans were to have the multi-products petroleum hub, which includes bunkering services, fully operational by the end of 2009.

''The project had been delayed due to land stabilisation works on the reclaimed island,'' Rashid told Bunkerworld on Wednesday.

''It took us more than seven months to complete the land stabilisation, including embankment work and the structural layout of the site,'' he said.

''The remaining work of the project is the easier part, and I do not foresee any more delays. We are also in the process of ordering and cutting steel plates to construct the oil tanks.''

"It took us more than seven months to complete the land stabilisation"

The extensive works in the method of stabilising the man-made island have hiked the project cost to about 2 billion ringgit ($622.3 million) from an initial 1.7 billion ringgit ($528.9 million), according to Rashid.

''There is no impact on the project's cash flow as the increased cost is covered by funding from the (Malaysian) government,'' Rashid said.

The 1.7-billion ringgit project is fully funded by state-owned bank CIMB.

The 100-acre reclaimed island, commonly known as Tanjung Bin, is located in the southern state of Johor, off the port of Tanjung Pelepas.

The island's onshore storage capacity is planned at one million cubic metres (m³).

The terminal is expected to handle over 30 million metric tonnes (mt) of petroleum products a year.

APH is 70% owned by Malaysia-based KIC Group, 10% by private financial investment firm Trek Perintis Sdn Bhd and 20% owned by Teori Selatan Sdn Bhd.

The Malaysian government likened the Tanjung Bin multi-products petroleum hub to the landmark project of the Iskandar Development Region, a government initiative to spur economic growth, especially for southern Peninsula Malaysia.