09-12-2011, 06:50 PM
Business Times - 09 Dec 2011
Rotary in Malaysian oil terminal project
Feasibility studies and master-planning work have started on the joint venture
By RONNIE LIM
SINGAPORE'S Rotary Engineering and Malaysia's Benalec Holdings are planning an independent oil terminal development, offering an initial one million cubic metres of storage in Tanjung Piai in south-western Johor.
If their joint venture is finalised, it will mark the first oil terminal in which the Singapore-listed engineering, procurement and construction group is taking a stake in.
The two companies announced yesterday that they have signed a memorandum of understanding for the project, with Rotary saying that feasibility studies and master-planning work had started.
Consequent to that, they 'will form a joint venture company by participating in taking equity ownership and development of the first one million cu m oil storage terminal as well as other terminal projects'.
No investment figure was given for the deepwater terminal, whose capacity is to be expanded to three million cu m in subsequent phases at the 250-acre site.
Reclamation is expected to start in six months' time and be completed by the first quarter of 2013 after which construction proper can begin. The terminal will store, blend and distribute crude oil and products, and will have jetty facilities to handle very large crude carriers.
As a rough gauge, Hin Leong Trading's 2.28 million cu m Universal Terminal on Jurong Island cost S$750 million to build in 2006, while the 840,000 cu m Horizon Terminal cost US$200 million. But this excludes reclamation costs for the latest Johor development.
There is also no indication at this time of what the equity split will be, although Rotary chairman and MD Chia Kim Piow told BT earlier this year that with banks more tight-fisted following the global credit crunch, they would be more reassured if Rotary takes about a 15-20 per cent stake in such projects - or roughly equivalent to its typical gross margin of 18-20 per cent for EPC projects.
This is a slight revision down from August last year, when Rotary first disclosed plans to take stakes in oil terminals in South-east Asia and the Middle East, saying then that it had the capacity to take up to a 30-40 per cent stake.
Vincent Leaw, Benalec managing director, said: 'We are delighted to have Rotary Engineering on board with us in our maiden foray into the high-growth oil and gas and petrochemical industry.'
Rotary's Mr Chia said: 'With Tanjung Piai's close proximity to Jurong Island, we see much synergy between Singapore and Johor in further developing this area into an even larger international petroleum hub.'
Rotary in Malaysian oil terminal project
Feasibility studies and master-planning work have started on the joint venture
By RONNIE LIM
SINGAPORE'S Rotary Engineering and Malaysia's Benalec Holdings are planning an independent oil terminal development, offering an initial one million cubic metres of storage in Tanjung Piai in south-western Johor.
If their joint venture is finalised, it will mark the first oil terminal in which the Singapore-listed engineering, procurement and construction group is taking a stake in.
The two companies announced yesterday that they have signed a memorandum of understanding for the project, with Rotary saying that feasibility studies and master-planning work had started.
Consequent to that, they 'will form a joint venture company by participating in taking equity ownership and development of the first one million cu m oil storage terminal as well as other terminal projects'.
No investment figure was given for the deepwater terminal, whose capacity is to be expanded to three million cu m in subsequent phases at the 250-acre site.
Reclamation is expected to start in six months' time and be completed by the first quarter of 2013 after which construction proper can begin. The terminal will store, blend and distribute crude oil and products, and will have jetty facilities to handle very large crude carriers.
As a rough gauge, Hin Leong Trading's 2.28 million cu m Universal Terminal on Jurong Island cost S$750 million to build in 2006, while the 840,000 cu m Horizon Terminal cost US$200 million. But this excludes reclamation costs for the latest Johor development.
There is also no indication at this time of what the equity split will be, although Rotary chairman and MD Chia Kim Piow told BT earlier this year that with banks more tight-fisted following the global credit crunch, they would be more reassured if Rotary takes about a 15-20 per cent stake in such projects - or roughly equivalent to its typical gross margin of 18-20 per cent for EPC projects.
This is a slight revision down from August last year, when Rotary first disclosed plans to take stakes in oil terminals in South-east Asia and the Middle East, saying then that it had the capacity to take up to a 30-40 per cent stake.
Vincent Leaw, Benalec managing director, said: 'We are delighted to have Rotary Engineering on board with us in our maiden foray into the high-growth oil and gas and petrochemical industry.'
Rotary's Mr Chia said: 'With Tanjung Piai's close proximity to Jurong Island, we see much synergy between Singapore and Johor in further developing this area into an even larger international petroleum hub.'
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