Singapore (Platts)--29Nov2012/435 am EST/935 GMT

The partners in the Malaysian Pengerang oil terminal have completed dredging for the first phase of the project and started work on storage tank foundations, a spokesman for the terminal operator said Thursday.

The project remains on track for planned startup in January 2014, he said.

Work on the terminal's jetty is ongoing, while land reclamation work for the first phase of the project was completed earlier in the year, the spokesman said.

The terminal, located in Pengerang in the southern state of Johor, is being developed by Pengerang Terminals -- a joint venture between Dutch oil and chemicals storage provider Vopak (49%) and Malaysian terminal operator Dialog (51%) -- which will also operate the facility once it is completed. The two partners own the facility through a second joint venture with the Johor government, which owns 10%.

The terminal will initially have a capacity of 1.3 million cubic meters of storage, with plans for a further 1 million cu m in a later expansion of the project's first phase.

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A Vopak official said in April that work on the terminal had commenced, with the cost of the project pegged at $620 million.

The spokesman also said Thursday that discussions with customers for crude and clean storage were ongoing, without providing further details.

In August, industry sources said two thirds of the project's capacity had already been committed to major tenants. At that time, four companies were said to have committed to tenancies, though they were not named.

The first part of the terminal due for January 2014 startup will cover 432,000 cu m of storage for clean products, the partners said earlier.

This phase will include six berths, including one that can serve VLCCs.

A second subphase would then see a further 432,000 cu m of clean storage added six months later, while the final part of the first phase, with 420,000 cu m of storage for crude oil, would be ready in January 2015.

Meanwhile, an industry source said Malaysia's Petronas had begun land reclamation work for its "RAPID" 300,000 b/d refinery and petrochemical complex in the same area. The RAPID project, to be built at a cost of $20 billion, will include a naphtha-fed steam cracker with a capacity to produce 3 million mt/year of ethylene, propylene and olefins; a petrochemicals and polymer complex that will produce differentiated and highly specialized chemicals; and an LNG import facility to support the energy needs of the complex.

--Jonty Rushforth, jonty_rushforth@platts.com --Edited by Elston Soares, elston_soares@platts.com

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