Dialog Group is to invest RM1bn ($238.3m) in its internal, upstream and downstream sectors in 2019. The group’s Chief Financial Officer, Senna Mohamed Shari, told the media after attending the annual general meeting of shareholders that the downstream business will dominate most of its RM500m ($119.1m) capital expenditure next year.
“We will allocate RM150m for internal capital expenditures and RM200m for our upstream operations.”
“We are also exploring the recurring revenue streams in Phases 1, 2 and 3 of the Joshua Oil Complex (PIPC) in Johor, and we will focus on investing in the centre next year.” He said: “The first and second phases have already begun. We are now focusing on the third phase, and we are striving for partners before the completion of the flood season.”
Phase 1 includes an independent terminal with a reserve of 1.3 million cbm and a dedicated deepwater terminal facility that is currently expanding an additional 430,000 cbm of oil.
Phase 2 is an oil and petrochemical terminal with an estimated storage capacity of 1.3 million cbm and will be fully completed in 2019. It is currently reclaiming the remaining 500 acres of land for its third phase and is likely to build another refinery and petrochemical complex.
Zhou Yongjia, Director of Corporate Services of Dialog Group, said: “At present, we are negotiating with several multinational companies to cooperate in the third phase of Bianjialan.”
“Since we have enough land, we are likely to turn to the oil and petrochemical industries. But we have not made any substantive decisions. If we want to invest, we will have a minority stake and we are looking for new partners for the third phase of the project.”
He pointed out: “We are confident that profits will grow, and we will expand storage facilities and maintenance services, which is expected to become a recurring income path.”
In April 2018, the group signed a memorandum of understanding with the Johor State Government to build the third phase of the Bianjialan Deepwater Terminal (PDT), including the construction of oil or petrochemical storage facilities, and the third terminal. The initial investment cost is RM25bn.
It will own 80 percent of the above terminal facilities, while the Johor State Government has the remaining 20 percent.
The Malaysian Investment Bank expects that the follow-on investment of other joint venture partners will dilute the equity of Dialog Group and increase the total investment value of the third phase, as the second phase of investment in a reclamation area will reach RM7.8bn. It is half of the third period.
The research firm revealed that it will be part of a 500-acre (202.34 hectare) area that includes more reclamation land and adjacent buffer zones. In addition, the Dialog Group will expand its hibernating Tanjung Langsha Terminal 3 to a storage facility of 300,000 cbm.
For more information visit www.dialogasia.com
28th November 2018