Dialog Group Bhd has entered into a 30-year concession to develop world-class centralised tankage facilities and a tank terminal with a global energy trader at the Port of Tanjung Langsat in Johor. The cost of the project is estimated at RM600 million, based on the similar scale Kertih Terminal Facilities Sdn Bhd in Terengganu, in which Dialog holds a 30 per cent stake. Dialog has also signed a Memorandum of Understanding with the Netherlands-based oil trader Trafigura Beheer BV, whereby 100 per centof the storage capacity of the tank terminal will be jointly developed and leased exclusively to Trafigura on a fixed monthly rental basis. Trafigura, an international trading company with more than US$1 billion (RM3.45 billion) in assets and US$45 billion (RM155.25 billion) in annual revenue, is invloved in supply and off take of crude oil, petroleum products, liquefied petroleum gas, metals and metal ores and concentrates. "The proposed facilities will propel the Port of Tanjung Langsat into a world-class logistics, liquid bulk-handling and trading hub of petroleum and petrochemical products," Dialog said in a statement. The project is also the first of six nominated services situated within the Iskandar Development Region (IDR). Analysts said the project would likely benefit from tax holidays and other incentives offered in the IDR. On Bursa Malaysia yesterday, Dialog's shares were 12 sen higher at a 12-month high of RM2.09 before trading was suspended at the company's request pending the announcement. The stock has risen 135 per cent so far this year, out performing the broader market's 19 per cent rise. "Dialog's rental revenue will increase once construction of the tank is completed as it can earn rental income from the Netherlands-based Trafigura," OSK Investment Bank Oil and gas analyst Chris Eng told Business Times yesterday. Rental income constituted about half of Dialog's RM63.5 million profit before tax in fiscal year 2006. Dialog will lease the land covered under the concession from Tanjung Langsat Port Sdn Bhd (TLP) for an aggregate sum of about RM38.1 million. The tank terminal will have a storage capacity of 400,000 cu metres of petroleum and petroleum related products. About 4ha of land adjacent to it will house the centralised tanker facilities, which will serve the terminal and other tank terminals to be developed in its vicinity. Trafigura will be the first long-term customer and investor of the tank terminal here. Industry sources said other global oil and gas players will be wooed to invest in the area at a later stage. Trafigura also has the option to take up a 20 per cent stake in the special purpose joint-venture companies expertise of all parties involved in the deal, the terminal facilities at the Port of Tanjung Langsat can be planned and designed to achieve world-class standard. At the signing ceremony in Johor yesterday, TLP was represented by its director Datuk Johari Mohamed and Dialog by its chairman and group managing director Nagau Boon Keat. Trafigura was represented by Graham Sharp, director of Trafigura Ltd, while TLP chairman Tan Sri Muhammad Ali Hashim witnessed the signing. Meanwhile, Muhammad Ali said Johor Corp will pump in another RM300 million to develop Pasir Gudang and Tanjung Langsat into the biggest biofuel hub in the region. The investment, which is on top of about RM500 million already invested to date, will include expansion and upgrading of port facilities infrastructure. Industry sources said the proximity of Tanjung Langsat to Pasir Gudang would spark expansion into biodiesel blending activities in the future. Muhammad Ali, who is also the chief executive officer of Johor Corp, said the Tanjung Langsat Industrial Complex has attracted 10 investors to date, with more than RM4.5 million worth of investment. | 
