PENGERANG, Malaysia - years after the project was envisioned, Prime Minister Najib Razak officially opened a multimillion-dollar oil storage terminal, standing on 61ha of reclaimed land at the southern tip of Johor. It is part of an ambitious plan to build Malaysia's biggest refining and petrochemical complex.
The entire US$22 billion (S$27.5 billion) project - to be called the Pengerang Integrated Petroleum Complex, or PIPC - is located off the eastern side of Pulau Tekong and aims to ride on the spillover of Singapore's position as an international oil and gas trading hub.
Datuk Seri Najib yesterday opened the Pengerang Independent Terminals, which has giant tanks that can store 1.3 million cubic m of crude oil and petroleum products, and a deep-water jetty that can accommodate very large crude carriers.
"This project is an important national achievement to develop the oil and gas industry in Malaysia, especially in Johor," he said in a speech to industry players as well as villagers who live around the complex, which is about 110km from Johor Baru.
The storage terminal was built by Malaysian oil and gas services firm Dialog Group, Holland's oil and gas storage provider Royal Vopak and the Johor government.
"There will be new roads, better electricity and water, new schools, modern homes, banks, medical facilities, shopping malls and office complexes," Mr Najib said. "There will be new business opportunities for local people, as demand for goods and services increases."
His sop to local residents followed protests by villagers and fishermen when the project was announced.
Malaysia's national oil firm Petronas will build the second part of the PIPC, which is called Refinery and Petrochemicals Integrated Development.
Mr Najib said that when fully completed, the integrated complex will house Malaysia's biggest commercial oil and gas storage facilities.
The country's other energy-business hubs include petrochemicals production and crude oil refining in Kerteh, Terengganu, and three liquefied natural gas plants in Bintulu, Sarawak.
Officials and analysts say the Pengerang complex has a good future if executed well.
"It will complement rather than compete with Singapore," said Mr Zulkifli Hamzah, research chief at MIDF Investment Bank in Kuala Lumpur. "The cake is big enough for everybody."
At the other side of southern Johor off Tuas, private companies are planning a 1,410ha man-made island to host another oil-storing and energy hub.
This article was first published on June 27, 2014.
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