Bright, long-term prospects for Dialog
Posted on May 1, 2012, Tuesday
KUCHING: The long term prospects for Dialog Group Bhd (Dialog) appears bright with the competion of the first phase of the Pengerang deepwater terminal project.
According to HwangDBS Vickers Research Sdn Bhd (HwangDBS Research) in a report, the land reclamation which covered an area of 150 acres was completed with some land treatment works still ongoing for certain areas.
For the record, Dialog’s contractor for reclamation land works was Japan-listed Penta-Ocean Construction Co Ltd (Penta-Ocean), a renowned Japanese contractor that specialises in marine works and land reclamation.
“We learnt that the first phase will mainly cater to import and export operations, and Dialog has identified customers for the capacity, thanks to Koninklijke Vopak NV, the world’s largest independent tank terminal operator, which has 44 per cent stake in Pengerang project,” said the research firm.
Physical construction would start by June and the project was expected to be completed by December 2013.
The research firm understood that 80 per cent of the 1.3 million square metre (sq m) capacity would be absorbed by long-term customers. The storage capacity under the first phase could support up to five refineries, according to the Dialog management.
Pengerang’s sheltered harbour with a depth of 24 metres makes it an ideal choice for an oil and gas (O&G) petrochemical hub, emulating the success of the port of Rotterdam.
“Meanwhile, Petroliam Nasional Bhd’s (Petronas) RM60 billion Refinery and Petrochemical Integrated Development (Rapid) project will be supported by the terminal when commissioned by 2016,” HwangDBS Research stated.
The management had earmarked an area of 75 acres in Pengerang for a future workshop and fabrication yard, likely to capture the strong services demand for Rapid and leveraging on Dialog’s integrated technical services.
“We are optimistic of Dialog’s long term prospects as its tank capacity will almost triple to 2.8 million sq m from one million sq m within three years,” added the research firm.
Apart from potential contributions from the commissioning of its Pengerang terminals, the company was poised to be the largest beneficiary of Petronas’ Rapid project. The RM5 billion Pengerang project, stretched over seven years, was a major transformation point for Dialog and would drive earnings going forward. Thus, HwangDBS Research maintained Dialog’s fair value of RM 2.23 per share.
- Teacher forces student to convert without parental consent
- Secret Chinese airport brought down to earth by chopper crash
- Air crash victims' hometown 'angry', 'shocked' by new findings
- Minister: Schoolgirl asks for ‘conversion’ but parents not informed
- Phone interception reveals 'crown prince' gave ‘green light’ to attack cops – officer