Doing something right

Doing something right
7 April 2018
Source: The Star

DIALOG Group Bhd has been the stellar oil and gas (O&G) stock on Bursa Malaysia. Its secret has not been the sexy upstream business which in the past has attracted much of the headlines . There are always many niche areas companies in the business can get involved in.

As for Dialog, it has found its calling in the oil storage business. The journey to this business segment has been monotonous , building one phase after another to increase the O&G storage business in Pengerang, Johor.

On Thursday, Dialog announced the third phase of such a business that it wants to turn that area of reclaimed land into Asia's storage and trading hub akin to Rotterdam.

The first phase involved building a tank age facility for the handling , storage , blending and distribution of oil. That facility has already been up and running since 2015 with a 1.3 million cu m capacity. It partnered Royal Vopak,a world leader,in that venture.

For phase two of the Pengerang Deepwater Terminal (PDT) , Dialog partnered Vopak , Petronas and the state of Johor, Construction  of PDT's phase two is ongoing, involving a larger storage capacity of 2.1 million cu m expected to be completed in early 2019.

With the construction of phase three, it goes to show that demand is there for such services , and with Pengerang on its way to becoming a petrochemical hub for Malaysia ,the decision to build the newest phase makes sense.

Dialog has profited greatly from such a business and its share price performance has reflected this. The stock has been immune to the vagaries of the tough O&G sector and is arguably one of just a few, if not the only, O&G stock that has seen its share sappreciate since the oil prices collapsed in 2014.

Right now, the stock is trading at RM3 * a share and has since early 2017 been on an uptrend, making it the envy of many O&G counters on Bursa Malaysia.