Vopak and its joint venture partners have signed a financing package to fund the construction of a new industrial terminal in Pengerang, Johor, Malaysia. The agreement with a syndicate of nine international banks is for a 15-year loan of $1.25 billion, representing around 80% of the project’s estimated total cost of $1.6 billion.

PT2SB is a jv between Vopak and Malaysian partners Petronas, Dialog Group Berhad and the state of Johor. Construction of the terminal began in 2015 and commissioning is scheduled to take place in phases during the first half of 2019. The facility will primarily serve Petronas’ Refinery & Petrochemical Integrated Development (RAPID) complex in Johor, which is currently being built and scheduled for completion in 2019.

Initially, the terminal will have a capacity of 1.65 million m³ for crude, refined products, petrochemicals and LPG as well as 12 berths capable of accommodating very large crude carriers.

Vopak, Dialog and the state of Johor are also partners in PITSB, a deepwater liquid storage terminal in Pengerang that will be connected by pipeline to PT2SB. The PITSB terminal is being expanded to provide extra capacity for clean petroleum products. Altogether 24 new tanks are being built, ranging from 10,000 m³ to 25,000 m³, to reach an overall capacity of 1.7 million m³ when completed. This expansion will also be commissioned progressively from the first quarter of 2019.

The Dutch terminal operator said the Pengerang region is strategically located along international shipping routes and is part of the Singapore oil hub, Asia’s main oil trading center, where there is a growing need for storage capacity.

During a presentation to analysts on Dec. 12 in Rotterdam, the Netherlands, Vopak’s global chemicals director, Ismail Mahmud, forecast that Asia’s need for plastics will dominate growth in chemical demand. “The world needs another 50 crackers in the next two decades if global ethylene demand is to be met,” he said, adding that new complexes will be built in Asia to be close to growing end-markets, as well as in feedstock-advantaged regions such as the US and Middle East.

Vopak is also expecting chemical trade flows to increase as regional imbalances continue to rise.