Govt welcomes RM2b Iskandar Malaysia oil terminal project

The Bunker Island project will be developed into a strategic oil hub for transshipment and storage activities

By DASHVEENJIT KAUR / Pic By BERNAMA

THE government has agreed to the development of a RM2 billion integrated oil terminal facility located on a man-made island, in the southern state’s Iskandar Malaysia development.

Transport Minister Anthony Loke said the Bunker Island project, which will be within the limits of Port of Tanjung Pelepas (PTP), Johor, will be developed into a strategic oil hub for transshipment and storage activities.

The Bunker Island is strategically located within the free commercial zone of Tanjung Pelepas and sits on a 100-acre (40.47ha) reclaimed island at Tanjung Bin.

“This strategic location allows Malaysia to benefit from the projected growth, creating a centre for oil break bulking, make-bulking, blending and redistribution to both domestic and regional markets,” Loke said in his keynote address after the signing ceremony between Johor Port Authority (JPA) and Smart Crest Sdn Bhd in Putrajaya yesterday.

Smart Crest signed a sublease with JPA and will be paying rental to the latter over the course of 30 years.

Smart Crest is given an incentive in the first two years where it would pay RM500,000 a year in rental to JPA, followed by RM2.19 million including 10% interest from the third year onwards.

JPA will be supervising the entire project that is estimated to complete in four years.

“Indeed, the Bunker Island story has been a long running saga. The man-made island itself was built in 2000 and completed in 2002. Since then and after some false starts, I am confident the project will now see the light of day, under the capable driving force of Smart Crest,” Loke said.

He said the government will not be forking out any money, but will only be facilitating and encouraging investment.

He also hopes other government agencies will likewise give greater facilitation and efficient services, not only to enhance PTP’s position as a regional transshipment hub, but also as a world class maritime centre providing a multitude of maritime facilities and services.

According to Loke, upon completion, the Bunker Island will be one of the largest independent and fully integrated oil terminal.

The Bunker Island facilities should also be in line with Johor Petroleum Development Corp’s plan to develop southern Johor as an important oil storage and terminal destination.

With 61 tanks located in five tank pits, it will have a storage capacity of approximately 1.2 million cu m and handling various types of product.

Apart from storage, the terminal facility will include two jetties with seven berths. The development of this island, according to Loke, will be a significant economic multiplier for the country as ships that enter to discharge or load oil will spend on other services.

“It is also anticipated that the Bunker Island project will help spur the growth of maritime and logistics cluster, thus elevating the current shipping service businesses in Malaysia, even more so in Johor.

“Services such as ship chandelling, stevedoring and logistics support can only benefit from this new economic impetus,” he said.

The whole project is estimated to cost RM2 billion and will be fully funded by the private sector.

Meanwhile, Smart Crest MD Cher Lee Kiat said the company is currently in talks with several foreign investors that have shown interest in the project, and is confident in being able to receive funds within the next few months.

“So far, the interested parties are from the Middle East, China and Hong Kong,” he said, adding that the entire project will be done in three phases.

The first phase, which is the bunker itself, is expected to be completed in two years and will generate early income for the rest of the project.

The second and third phases will take another one to two years to complete.