Johor reclamation project 'to create oil storage hub'

Johor reclamation project 'to create oil storage hub'

One of the two massive reclamation projects coming up in the Johor Strait will be turned into an oil storage hub to capture spill-over oil and gas business from Singapore, an official with the company involved in the works said yesterday.

The project involving Benalec Holdings will raise a 1,410ha man-made island near Jurong Island, the firm's chief operating officer Bernard Boey told The Straits Times.

The reclamation is expected to begin before the end of the year.

The project, located off Johor's Tanjung Piai coast, is roughly twice the size of Ang Mo Kio.

The massive size of the other planned reclamation in the Johor Strait near the Second Link bridge has also sparked controversy, given the lack of details from the developer, China's Country Garden Holdings and its partner Kumpulan Prasarana Rakyat Johor.

The Forest City reclamation, as it is called, is reportedly 2,000ha in total area - nearly three times the size of Ang Mo Kio.

The man-made island near Jurong Island that Benalec is involved in is called the Tanjung Piai Maritime Industrial Park, according to the firm's website. Once completed, oil storage facilities would be built, Mr Boey said.

"Our intention is to capture the spillover from Jurong," he said, referring to Jurong Island's position as a global energy and chemicals hub with some $42 billion worth of investments.

The Malaysian government's plan to capture some of the global energy business from Singapore includes backing the construction of a US$16 billion (S$20 billion) project on the other side of Johor, in Pengerang, called the Refinery and Petrochemicals Integrated Development (Rapid) development, media reports say.

Benalec is also involved in the reclamation works to extend the shoreline of the Rapid project in Pengerang, Mr Boey said. "The route of oil from the Middle East that is heading to China, Japan and (South) Korea - if you have these facilities, you can cater to the demand," Mr Boey said.

He said that apart from the plans by Malaysia, there are international companies setting up oil storing hubs in Indonesia's Batam and Karimun islands.

The Benalec and Forest City plans have raised concerns among environmentalists because fishing grounds, water flows and mangrove forests would be affected.

Mr Boey said the reclamation works for the oil storing hub would start only after the authorities are satisfied with the way the project promoters plan to mitigate its impact on the surrounding environment. Benalec is expected to pay compensation to fishermen in nearby villages who would be affected, he said.

Work near Second Link 'has stopped'

Johor's Cabinet minister for the environment Ayub Rahmat said the Chinese developer of a controversial reclamation project in the Johor Strait voluntarily stopped work about a week ago, pending studies on its environmental impact.

Singapore has expressed its concern over the Forest City project in diplomatic notes to Putrajaya, asking it for more details so it could study the possible impact on the Republic and the strait.

"The developers voluntarily stopped the project about a week ago," he told The Straits Times yesterday, saying the works could restart only when the authorities are satisfied that its environmental impact would be mitigated.

The 2,000ha project near the Second Link, on the Malaysian side of the border, is being developed by China's Country Garden Holdings and a Johor state company, Kumpulan Prasarana Rakyat Johor.

The project, which is to be carried out over 30 years, has raised concerns over its environmental impact, including its effect on nearby mangrove swamps, marine animals and the flow of water in the narrow Johor Strait.

Work on a 49ha plot of reclaimed land as part of Forest City started in March, with plans for a tourist hub, an 80-room hotel and recreational facilities, the New Straits Times newspaper reported yesterday.

Datuk Ayub, Johor's State Health and Environment Committee chairman, said that while the reclamation is less than 50ha, the developers have to submit environmental impact assessment (EIA) studies because they planned to build the 80-room hotel on the man-made island, thus increasing its density.

A report in The Edge Review online magazine last month said the Forest City project promoters had planned to divide the 2,000ha project - nearly three times the size of Ang Mo Kio estate - into smaller plots of 50ha to avoid having to submit EIA reports. Malaysian environmentalists have expressed concerns over the consequences of the project, pointing out that the area is home to mangroves, sea-horses and dugongs.

Mr Ayub said all development projects will impact the surrounding environment, and the developers thus have to provide details about how they would mitigate the effect while the project is being carried out, and also how the area would be rehabilitated after the project is completed.

The Johor state government would monitor further discussions between the project developers and the Department of Environment, he said.

This article was first published on June 25, 2014.
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