Photo courtesy by PETRONAS
Pengerang Integrated Petroleum Complex (PIPC) sits on a 22,000-acre area in Pengerang, to the south-east of Malaysia’s Johor state. The PIPC is designed to accommodate downstream oil and gas industrial facilities such as refineries and petrochemical plants, deep-water terminal and storage tanks, naphtha crackers, regasification plants and supporting facilities, as well as manufacturing plants and industrial parks.
To be developed over four phases from 2012 to 2037, the PIPC covers both core and non-core downstream activities. Included in the PIPC master plan are designated areas for related support services such as a plastic and fine chemicals park, a light and medium industrial park, a waste management center, an emergency response center, a logistics hub, a commercial hub and others.
The striking attraction of the PIPC lies in the robust design of the PIPC master plan that strives to enable and promote future growth and sustainability, by offering a wide spectrum of investment opportunities targeted at downstream oil and gas and petrochemical-based players.
Being a project of national strategic importance, the PIPC is given perks with the government of Malaysia’s prioritised support. This can be seen with the establishment of Johor Petroleum Development Corporation Berhad (JPDC), a dedicated federal government agency under the Prime Minister’s Department and Economic Planning Unit, mandated to plan, coordinate, facilitate and promote the overall development of the PIPC. The JPDC covers the depth and breadth of a “project manager” role in making sure the development of the PIPC is on track, according to plan and with sufficient funds. At the same time, JPDC performs an “investment promoter” role, providing guidance to potential parties seeking to invest in the PIPC.
PIPC has just completed its first development phase (2012-2019), which witnessed two significant, world-class catalytic projects completed.
Pengerang Deepwater Terminals (PDT), developed by DIALOG Group Berhad and its investment partners, is a deepwater terminal with oil storage facilities developed on a 1,300-acre area with an investment value of RM10 bilion. It has been operational since April 2014.
Pengerang Integrated Complex (PIC) developed by PETRONAS is an integrated downstream petroleum complex covering an area of 6,303 acres with an investment value of about RM110 billion (USD27 billion). PIC includes a refinery and petrochemical centre owned and operated by PRefChem, a joint-venture between PETRONAS and Saudi Aramco. The construction of PIC, which began in 2015, has been completed and it is in final stages of preparation for commercial opening by 2021.
Further evidence of government support can be seen through the development of world-class infrastructure and public amenities for convenient mobility and connectivity, at a development value of almost RM2.4 billion.
Additionally, a further benefit lies in having a dedicated government forum to facilitate development of the PIPC, supported by the strong involvement of both the federal government of Malaysia and the state government of Johor.
There are incentives applicable to investors, both local and foreign. These include investment tax allowances, import duty exemptions, reinvestment allowances and others. These incentives may vary between plans and structures, depending on the status of companies investing in Malaysia or the PIPC. JPDC, being the appointed organisation to oversee the overall development of the PIPC, collaborates with the Malaysian Investment Development Authority (MIDA) to actively guide investors to the applicable incentives.
To date, JPDC has been organising and coordinating a series of re-skilling and upskilling training programs for almost 4,000 local manpower, aimed at creating a downstream oil and gas industry workforce.
Compared to other regions or similar projects, the PIPC possesses more strength with access to existing major international shipping lanes between the Middle East and China. The proximity of Pengerang to Singapore is a huge benefit, as Malaysia’s refinery hub has to be close to the world’s commodity traders that are largely based in Singapore. Apart from that, the PIPC has water depth of more than 24 m with a harbor that is safe and sheltered throughout the year. With no breakwater, it enables very large crude carriers (VLCC) and ultra large crude carriers (ULCC) to operate. It also has few environmentally sensitive areas and these can easily be preserved. These key strengths make it the ideal location for the development of a major integrated petroleum complex. When fully completed, the PIPC will have a complete portfolio of products, full trading facilities and will be a center of excellence for downstream oil and gas for the country and region.
PIPC is open for business.