1. INTRODUCTION
DIALOG Group Berhad ("DIALOG") is pleased to announce the expansion of Phase 3 of the Pengerang Deepwater Terminals ("PDT") in Pengerang, Johor, southeastern Peninsular Malaysia, following the entry into a conditional long term service agreement ("LTSA") between Dialog Terminals Pengerang (5) Sdn. Bhd. ("DTP5"), Dialog Terminals Sdn. Bhd. (“DTSB”) and BP Singapore Pte Limited ("bp Singapore").
This conditional LTSA, signed on 18 November 2025, will add an additional 614,000 m3 of tank capacity for refined petroleum products and biofuels, with bp Singapore as the dedicated long-term customer. The completion date for this expansion is expected in mid-2028. This expansion represents another milestone in the Group’s midstream development.
Launched in 2018, Phase 3 PDT is a key component in DIALOG’s midstream development, reinforcing DIALOG’s commitment to developing Pengerang Deepwater Terminals into the largest petroleum and petrochemical hub in the Asia Pacific region. Phase 3 PDT comprises (1) common tankage facilities including shared infrastructure and dedicated deepwater marine facilities and (2) the development of additional petroleum and petrochemicals storage terminals for multiple medium to long-term customers including oil traders, multinational oil companies, refineries, and petrochemical plants.
In March 2021, operations commenced for the initial 430,000 m3 storage capacity, with bp Singapore being the long-term customer. This infrastructure laid the groundwork for the scaling up of Phase 3 PDT, marking another strategic milestone in Pengerang Deepwater Terminals development. Upon completion of the current expansion of Phase 3 PDT, PDT’s total storage capacity will increase to approximately 1 million m3 across 48 tanks, effectively more than doubling its existing capacity of 430,000 m3. In parallel, the addition of five new operational berths will enhance marine handling capacity.
Envisioned as a one-stop integrated terminal, Phase 3 PDT provides Port and Marine Operations, Storage Tank Terminals and Common Facilities including deepwater jetty facilities, integrated berth planning, cargo handling, interconnecting pipelines across PDT, multi-product storage, integrated infrastructure solutions, and shared third-party utilities and services. The ‘plug and play’ model is designed to ease setup processes for both customers and investors. Furthermore, Phase 3 PDT is strategically positioned to support various downstream operations including those of refinery and petrochemical plants within the Pengerang Integrated Petroleum Complex and in Asia Pacific region.
The further expansion of Phase 3 PDT above is in line with DIALOG’s progressive development plans for Phase 3 PDT and its strategy to continue increasing long term recurring income for the Group. Phase 3 PDT will also unlock further opportunities for DIALOG’s engineering, construction, fabrication, and plant maintenance divisions to deliver integrated services and solutions.
Rationale and Prospects
Phase 3 PDT reinforces DIALOG’s midstream investments and supports development plans in PDT, a strategic port and storage facility in southern Peninsular Malaysia. Operational since 2014, PDT, spanning a total land area of approximately 1,200 acres, has expanded in phases and now includes four terminals and three jetties. Its deepwater jetties are capable of accommodating VLCCs and Q-Max LNG vessels. The remaining approximately 660 acres of reclaimed and buffer land are reserved for future development. DIALOG remains committed to developing Pengerang Deepwater Terminals into the largest petroleum and petrochemical hub in the Asia Pacific region.
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 THIS EXPANSION OF PHASE 3 PDT
2.1 SCOPE OF WORK
The scope of work for this expansion of Phase 3 PDT involves the engineering, procurement, construction and pre-commissioning, which will be undertaken by DIALOG’s wholly owned subsidiary.
2.2 CONDITIONAL PRECEDENT
The effectiveness of the LTSA is contingent upon the fulfillment of several conditions precedent within six months from the date of the agreement, or within such other period as may be mutually agreed upon in writing by the parties. These conditions include: obtaining all necessary permits and approvals for this expansion of Phase 3 PDT; successful completion by bp Singapore of comprehensive due diligence on all material aspects related to the construction and operation of the storage terminal; and bp Singapore’s confirmation that the required licenses and/or approvals have been secured to store and trade refined petroleum products and biofuels at the storage terminal (“CPs”).
2.3 COMPLETION PERIOD
This expansion of Phase 3 PDT will commence upon fulfillment of CPs and is expected to be completed in mid of 2028.
2.4 SOURCES OF FUNDING
It is envisaged that DIALOG will use both internally generated funds and borrowings to finance this expansion of Phase 3 PDT.
2.5. LIABILITIES TO BE ASSUMED
No liabilities, including contingent liabilities will be assumed by DIALOG, arising from the LTSA and this expansion of PDT3, save for the provision of parental/performance guarantees.
3. INFORMATION ON DTP5
DTP5 is a wholly owned indirect subsidiary of DIALOG.
DTP5 is principally engaged in the provision of tank terminal storage facilities and handling services for petroleum and petrochemicals. DIALOG is a leading integrated technical service provider to the energy sector, in Malaysia and internationally.
4. INFORMATION ON DTSB
DTSB is a wholly owned subsidiary within the DIALOG Group of Companies, primarily focused on investment holding. DTSB is the immediate parent company of DTP5.
5. INFORMATION ON bp Singapore
bp Singapore, a direct and indirect subsidiary company of BP International Limited and BP p.l.c respectively, is a private limited liability company incorporated and domiciled in Singapore. Its principal activities include the marketing and trading of petroleum products.
6. FINANCIAL EFFECTS
This expansion of the Phase 3 PDT 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 2026. However, it is expected to contribute positively to the future earnings of DIALOG group.
7. RISKS
The risk factors affecting this expansion of the Phase 3 PDT include changes in economic, geo-political and regulatory environment, and operational risk such as completion risk which DIALOG will take appropriate measures to manage and minimize.
8. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND PERSONS CONNECTED WITH THEM
None of the directors of DIALOG, major shareholders of DIALOG and/or persons connected with them have any interest, whether direct or indirect, in the LTSA.