Maybank Research retains `buy` call on Dialog

6 April 2018
Source: The Malaysian Reserve

DIALOG Group Bhd has entered into a memorandum of understanding (MoU) with the Johor state government and Johor State Secretary Inc (JSS) to invest RM2.5 billion in the third phas e of the Pengerang Deepwater Terminals.

"I hope with the launch of the third phase of the project, we will be able to attract anothe r refinery and petro - chemicals complex, which will enable Pengerang to turn into a huge petroleum downstream manufacturing centre," Dialog Group executive chairman Tan Sri Dr Ngau Boon Keat said in a statement yesterday.

"This will in turn attract Organisation of Economic Cooperation and Development countries to use its storage facilities as a strategic oil reserve hub given its strategic location in Asia Pacific — it is like a central bank of oil."

Under the arrangement with the Johor authorities, Dialog will hold an indirect 80% stake in Pengerang CTF Sdn Bhd which is to undertake the works, while the JSS-unit Permodalan Darul Ta'zim Sdn Bhd will hold the remaining 20% interest in the joint-venture company.

This is aimed at supporting and promoting the petroleum and petrochemica l storage, and handlin g tank termina l business to be constructed and carried out at the 300-acre (121.41ha) site, while the arrangement will further see the development of industrial land for the downstream oil and gas-related activities.

The third phase of the Pengerang Deepwater Terminals will be developed next to the second phase of the project. — TMR