It is most likely that a Taiwanese company will also be investing more money to build another 400,000 barrel per day refinery. Plus the tank farm I described yesterday all these projects will take the investments in Pengerang to over RM100.0 billion already.
Petronas’ refinery plus the petrochem plants will make Pengerang the petrochemical and petroleum hub of South East Asia. And we will overtake Singapore in certain products. Its all because of land – they don’t have land.
This entire project in Pengerang is feasible because of one very large ingredient – the deep water berthing at this spot. The water depth is 24 metres which can take in VLCC tankers (Very Large Crude Carriers) as well as ULCC tankers (Ultra Large Crude Carriers). VLCCs are in the 160,000 to 220,000 250,000 ton range whereas ULCCs are in the 320,000 – 550,000 tons range, floating steel mammoths. Here is a picture of an ULCC tanker : which weighs 441,000 tons and is 1,247 feet long. This is a monster.
Folks this is the 21st century. There are 7 billion people in this world and the number is growing. The world’s population will definitely stabilize and we will all live in balance with nature and with ourselves. A 7 billion world population will require huge amounts of products – fuel, petrochemicals, plastics, food and stuff to maintain modern life. So put your best foot forward and educate our kids well. The future is simply great. Do not despair.
These industries have to build big. They must have the economies of scale. VLCCs, ULCCs, 22,500 acres of petrochemical plants, 500 acres of tank farms will be basic facilities to meet this huge demand from a 7 billion world population.
Deep water berths to receive all these VLCCs and ULCCs are not man made. They are naturally occurring. The Creation made them. Singapore only has 18 metre berths – a drawback to attract ULCCs. This is where Pengerang makes the difference.
Dr Ngau Boon Keat, the Executive Chairman and founder of Dialog is an oil man with over 40 years experience. He has experience working in Petronas since its early days as well. Since 1984 he has built his company Dialog Bhd into a significant player in the oil and gas business. They build tank farms.
Dr Ngau had a dream and a vision. Six years ago, he had a one and half hour lunch with Dato Ghani Othman the MB of Johor. In that lunch he explained how his team had surveyed the Malaysian coastline and discovered that Pengerang had the best natural sites to host a deepwater terminal, a tank farm and hence provide many competitive advantages to incubate an entire petrochemical industry. The numbers were huge – RM100 billion investment, 300,000 barrels per day refineries, 5 million cubic metre tank storage capacities, 6000 acres for Petronas’ petrochemicals (RAPID) and so forth. Plus Singapore was right next door. They would compete in some places but also complement Singapore in many other areas.
The savvy MB, being a trained economist immediately grasped the significance and hugeness of the entire concept. Six years later Pengerang is moving.
Folks, 20 years ago as a banker I helped finance the Kemaman Supply Base in Terengganu. This was a supply base from where supply ships would transport materials (steel pipes, diamond tipped drills to the oil rigs in the South China Sea), We used to visit Kemaman – a beautiful natural port in Terengganu, just across the border from Pahang. The sea water in Kemaman is a thick royal blue right up to the jetty – under your feet. Today, if you visit Kemaman there are traffic jams, strip malls, shopping complexes, housing, office complexes and (unfortunately) traffic jams. Kemaman is also cosmopolitan now – people from all over the world live and work in Kemaman. (And all the way to Kerteh as well).
The same changes are going to impact Pengerang. Kemajuan is coming - in huge doses. The Pengerang project will be larger than Kerteh, Gebeng and Melaka (Petronas Refinery) combined. So do watch this space.
I have one more instalment on Pengerang. Its about some angry lobsters. Till then.