KUALA LUMPUR, Dialog Group Bhd (KL:DIALOG) announced that its associate, Pengerang Terminals (Two) Sdn Bhd (PT2SB), will invest US$330 million (RM1.4 billion) to expand storage capacity in Johor’s refinery hub following a 25-year storage and handling agreement with Pengerang Biorefinery Sdn Bhd (PBSB) — a joint venture between Petronas, Eni SpA and Euglena Co Ltd.
PT2SB, in which Dialog owns a 25% stake, will add 272,000 cbm of dedicated storage for PBSB. A terminal use agreement (TUA) under a take-or-pay arrangement was signed on July 29, covering the storage capacity and associated shared facilities, Dialog said.
Dialog associate to invest US$330m following 25-year storage contract win
The expansion project, set for completion in the first half of 2028, will leverage PT2SB’s existing capacity and deep-water terminal infrastructure at the Pengerang Integrated Complex. Dialog noted that similar projects in Pengerang have historically delivered low double-digit internal rate of returns.
“This expansion reinforces Dialog’s midstream investments and supports the continued development of the Pengerang Deepwater Terminals (PDT),” the company said.
PDT currently spans 1,200 acres, featuring four terminals and three jetties, with another 700 acres reserved for future development.
Dialog emphasised the project aligns with its strategy of building recurring income streams and diversifying across the energy value chain, including green energy initiatives, to withstand economic and oil price fluctuations.
PBSB — comprising Petronas Mobility Lestari Sdn Bhd (42%), Enilive SpA (42.5%) and Euglena Sustainable Investment Ltd (15%) — reached a final investment decision in July 2024 to build a biorefinery in Malaysia. The plant aims to process 650,000 tonnes of raw materials annually to produce sustainable aviation fuel, renewable diesel (HVO), and bio-naphtha.
Besides Dialog, PT2SB’s other shareholders include PRPC Utilities and Facilities Sdn Bhd (40%), Vopak Terminal Pengerang BV (25%) and Johor state-owned Permodalan Darul Ta’zim Sdn Bhd (10%).
Dialog’s shares last traded flat at RM1.71, valuing the group at RM9.65 billion. The stock is down 7.5% year-to-date.
