Dialog unit, Johor Inc ink pact to develop terminal

KUALA LUMPUR: Dialog Group Bhd's 51%-owned subsidiary Pengerang Terminals Sdn Bhd (PTSB) has inked a shareholders' agreement with State Secretary, Johor (Incorporated) to invest in Pengerang Independent Terminals Sdn Bhd (SPV).

In a filing with Bursa Malaysia on Wednesday, July 6, Dialog said the agreement is to undertake the first-phase portion of the design and development of an independent deepwater petroleum terminal at Pengerang, Johor.

Under the agreement, PTSB will hold a 90% equity stake in SPV and the balance will be held by the State Secretary, Johor (Incorporated).

The agreement is pursuant to the development cum joint venture agreement between Dialog, the state government of Johor and the State Secretary, Johor (Incorporated) signed on May 13 this year.

On the funding for the SPV, Dialog said PTSB's eventual equity investment in SPV would be determined later as the SPV is in discussions with financial institutions on the terms, including funding structure for the project.

"It is envisaged that PTSB will use its proceeds from both share capital and shareholders' loan to fund its portion of equity investment in SPV.

"Dialog will finance its portion of share capital and shareholders' loan in PTSB by way of internally generated funds and borrowings," it said.

Dialog holds 51% of PTSB and the balance is held by Vopak Terminal Pengerang BV, which is part of the Royal Vopak group.

The SPV will undertake the first-phase portion of the design and development of an independent deepwater petroleum terminal at Pengerang with onshore facilities, topsides, harbour port, jetty and other marine facilities.

This first-phase terminal will have an initial storage capacity of approximately 1.3 million cubic metres and is expected to be commissioned in 2014.