1. INTRODUCTION
DIALOG Group Berhad ("DIALOG") is pleased to announce that its 25% indirectly owned joint venture company, Pengerang Terminals (Two) Sdn. Bhd. (“PT2SB”) has on 29 July 2025 signed a Terminal Usage Agreement (“TUA”) with Pengerang Biorefinery Sdn. Bhd (“PBSB”), paving the way for PT2SB to provide storage and handling facilities for PBSB’s feedstocks and products (“The Expansion Project”).
Under The Expansion Project, PT2SB will expand and develop a storage capacity of about 272,000 cbm which is dedicated to PBSB at a total investment of approximately USD330 million including costs associated with shared facilities at the terminal. The Expansion Project is supported by a 25-year long-term take-or-pay TUA and will benefit from efficiencies of current capacity and infrastructure of PT2SB.
PT2SB owns and operates a dedicated deep-water terminal serving Pengerang Integrated Complex (“PIC”). The shareholders of PT2SB are Dialog Equity (Two) Sdn. Bhd. (subsidiary of DIALOG) (25%), PRPC Utilities and Facilities Sdn. Bhd. (subsidiary of Petroliam Nasional Berhad (PETRONAS) (“PETRONAS”)) (40%), Vopak Terminal Pengerang BV (subsidiary of Royal Vopak) (25%) and Permodalan Darul Ta'zim Sdn. Bhd. (a Johor State owned company) (10%).
Whereas PBSB is a joint venture between PETRONAS Mobility Lestari Sdn. Bhd. (a subsidiary of PETRONAS) (42.5%), Enilive S.p.A (a company directly controlled by Eni S.p.A.) (“Eni”) (42.5%), and Euglena Sustainable Investment Limited (a subsidiary of Euglena Co., Ltd.) (“Euglena”) (15%).
The biorefinery of PBSB will have the capability to process about 650,000 tonnes per year of raw material to produce Sustainable Aviation Fuel (“SAF”) and other biofuels such as Renewable Diesel/ Hydrogenated Vegetable Oil (“HVO”) to cater to the growing demands of the global aviation and transportation industries.
Prospects
The Expansion Project reinforces DIALOG’s midstream investments and supports development plans in Pengerang Deepwater Terminals (“PDT”), a strategic port and storage facility in southern Peninsular Malaysia. 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 700 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.
In addition, the development of storage facilities for sustainable and renewable products under The Expansion Project aligns with the 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. The Expansion Project also complements the initiatives by the Group to achieve business sustainability and fulfil its Environmental, Social and Governance agenda through commercially viable ventures.
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 THE EXPANSION PROJECT
2.1 SUMMARY OF THE EXPANSION PROJECT
Under The Expansion Project, PT2SB will expand and develop a storage capacity of about 272,000 cbm which is dedicated to PBSB at a total investment of approximately USD330 million including costs associated with shared facilities at the terminal. The Expansion Project is supported by a 25-year long-term take-or-pay TUA and will benefit from efficiencies of current capacity and infrastructure of PT2SB.
2.2 COMPLETION PERIOD
The Expansion Project will commence immediately and is expected to be completed in the first half of 2028.
2.3 SOURCES OF FUNDING
It is envisaged that PT2SB will use both internally generated funds and borrowings to finance The Expansion Project.
2.4 LIABILITIES TO BE ASSUMED
No liabilities, including contingent liabilities will be assumed by DIALOG, arising from The Expansion Project.
3. INFORMATION ON PT2SB
PT2SB owns and operates a dedicated deep-water terminal serving Pengerang Integrated Complex (“PIC”).
The shareholders of PT2SB are Dialog Equity (Two) Sdn. Bhd. (subsidiary of DIALOG) (25%), PRPC Utilities and Facilities Sdn. Bhd. (subsidiary of PETRONAS) (40%), Vopak Terminal Pengerang BV (subsidiary of Royal Vopak) (25%) and Permodalan Darul Ta'zim Sdn. Bhd. (a Johor State owned company) (10%).
4. INFORMATION ON PBSB
PBSB is a joint venture between PETRONAS Mobility Lestari Sdn. Bhd. (a subsidiary of PETRONAS) (42.5%), Enilive S.p.A (a company directly controlled by Eni S.p.A.) (“Eni”) (42.5%), and Euglena Sustainable Investment Limited (a subsidiary of Euglena Co., Ltd.) (“Euglena”) (15%).
5. FINANCIAL EFFECTS
The Expansion Project 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.
6. RISKS
The risk factors affecting The Expansion Project include changes in economic, political and regulatory environment, and operational risk such as completion risk which DIALOG and PT2SB will take appropriate measures to manage and minimise.
7. 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 Expansion Project.
This announcement is dated 30 July 2025.