Press Releases

Expansion of DIALOG Terminals Langsat (3) Sdn. Bhd. Into Renewable Products Storage

1. INTRODUCTION

DIALOG Group Berhad (“DIALOG”) is pleased to announce that DIALOG’s indirect wholly owned subsidiary, Dialog Terminals Langsat (3) Sdn. Bhd. (“DTL3”) will be expanding its terminal operations with the development of  storage facilities for renewable products at its terminal in Tanjung Langsat, Johor Darul Ta’zim, Malaysia, namely DIALOG Terminals Langsat 3 (“Project DTL3”). Project DTL3 is DIALOG’s first foray into storage facilities for sustainable and renewable fuel products with a storage capacity of approximately 24,000 m3 connected to truck loading bays and existing marine facilities.

Rationale and Prospects

This development is largely in response to growing investor interest in low-carbon fuel alternatives and DIALOG is expanding its terminal operations to cater for such sustainable and renewable fuel products.

Bulk fuel storage terminals have an opportunity to become principal facilitators of the energy transition by helping to develop new low-carbon lines of products and services. Terminals could also play a pivotal role in the transport and logistics of newer, emerging product lines like biodiesel, sustainable aviation fuel and their associated feedstock. In essence, this gives terminals a new lease on life and new value in the energy transition, while retaining their traditional role as the gateway to energy trading. Potential users include biofuel production companies, energy trading houses, multinational energy companies and others.

The development of storage facilities for sustainable and renewable products is in line with low-carbon economy transition under DIALOG’s Climate Change Strategy as part of ongoing efforts to expand product and solution offering to support the growth and development in the sustainable and renewable sector. This development is also a continuation of the initiatives by the Group to achieve business sustainability and fulfill its Environmental, Social and Governance agenda through commercially viable ventures.  

In addition, the strengthening of the midstream capabilities will lead to an increase in DIALOG’s sources of sustainable and recurring income in the future and reinforces DIALOG’s position as a leading integrated technical services provider.

DIALOG will remain focused and steadfast in the pursuit of diversification across the upstream, midstream and downstream energy sector as well as the sustainable and renewable sector to strategically position the Group to weather different economic and oil price cycles, which is in line with the Group’s strategy of generating long term recurring income.

2. DETAILS OF PROJECT DTL3

2.1 SCOPE OF WORK

DIALOG will undertake the engineering, procurement and construction of the storage facilities for sustainable and renewable fuel products with a storage capacity of approximately 24,000 m3 connected to truck loading bays and existing marine facilities.

2.2 PROJECT DTL3 PERIOD

The engineering and construction of Project DTL3 will commence immediately and expected to be completed in Q4 2024.

2.3 INFO ON DTL3

Dialog Terminals Langsat 3 (“DTL3”) is an operating terminal with storage capacity of  205,000  m3 serving short to medium term energy traders and multinational companies storing energy products.  It is located adjacent to two other terminals i.e. DIALOG Terminals Langsat 1 and DIALOG Terminals Langsat 2.

3. FINANCIAL EFFECTS

Project DTL3 is not expected to have any effects on the share capital and substantial shareholders’ shareholding of DIALOG and is not expected to have any material effects on the earnings, net assets and gearing of DIALOG for the current financial year ending 30 June 2023. However, it is expected to contribute positively to the future earnings of DIALOG group.

4. RISKS

Risk factors affecting Project DTL3 include but are not limited to execution risks, such as availability of skilled manpower, technical expertise and materials, changes in prices of materials, and changes in political, economic and regulatory conditions. Nevertheless, DIALOG will undertake all the necessary efforts to mitigate the various risk factors identified.

5. DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS

In so far as the directors of DIALOG are able to ascertain, none of the directors of DIALOG, major shareholders of DIALOG and/or persons connected with them have any interest, whether direct or indirect, in Project DTL3.

This announcement is dated 16 February 2023.

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