Pengerang has potential as largest oil and gas hub in Asia

Prime Minister Datuk Seri Najib Razak being presented with a souvenir by the president and CEO of Petronas, Datuk Wan Zulkiflee Wan Ariffin, during his visit to the Pengerang Integrated Complex in this file picture taken on December 5, 2016. — Bernama pic
Prime Minister Datuk Seri Najib Razak being presented with a souvenir by the president and CEO of Petronas, Datuk Wan Zulkiflee Wan Ariffin, during his visit to the Pengerang Integrated Complex in this file picture taken on December 5, 2016. — Bernama pic

KUALA LUMPUR, Feb 24 — The subdistrict of Pengerang in Johor thrives as a downstream oil and gas industry hub, with investment worth billions of ringgit as a result of brilliant strategies introduced by Johor Petroleum Development Corporation Berhad (JPDC).

JPDC, a subsidiary of Malaysia Petroleum Resources Corporation (MPRC), has a big hand in the development of the Pengerang Integrated Petroleum Complex (PIPC).

The complex situated in Pengerang, which sprawls over 8,093 hectares of land, is an integrated hub with an investment potential of RM221 billion (US$52 billion). Its facilities include liquefied natural gas (LNG) and petrol storage tanks, petrochemical plant, regasification plant, refinery, power plant and facilities to decompose naphthalene.

“JPDC is optimistic that it will attract more investment to PIPC,” said its chief executive Mohd Yazid Jaafar.

So far, PIPC has lured big investments from two main investors, namely Petronas which is involved in the Refinery and Petrochemical Integrated Development (RAPID) project as well as Dialog-Vopak and its Pengerang Deepwater Terminal (PDT) project.

Foreign investors showed interest in what PIPC could offer from the get-go, said Mohd Yazid.

Petronas is among the main investors in Pengerang and has invested RM115 billion (US$27 billion) so far, with its projects taking up 25 per cent of the developed area in Pengerang.

Strategic location lures investors

Pengerang has its own unique allure which includes a strategic location and proximity to sea passages, as well as a naturally deep sea with a depth of 24 metres.

“A natural deep sea and strategic location are among the attributes that appeals to foreign investors,” Mohd Yazid admitted.

A naturally deep sea is important because it is not easily silted when projects are carried out, and it also allows bigger vessels like Ultra Large Crude Carrier (ULCC) and Very Large Crude Carrier (VLCC) to enter the port. This is also advantageous in terms of cost and logistics.

Though the Pengerang oil and gas hub is still in its infancy, the land in Pengerang is vast and has the potential for large scale projects.

Mohd Yazid stressed that a well-planned out development would help Pengerang prosper further, with the petrochemical industry of Pengerang in Johor and Pulau Jurong in Singapore complementing each other as Asia’s oil and gas hub like the Amsterdam-Rotterdam-Antwerp (ARA) hub in Europe.

JPDC is also capable of meeting the demand for oil and gas storage facilities like that of Singapore’s oil and gas hub.

Malaysia and Singapore can form a hub like the Amsterdam-Rotterdam-Antwerp (ARA) in boosting the refining capacity, free storage, blending capacity and access to the market.

Training for workforce

In efforts to develop and promote Pengerang as a renowned oil and gas hub in Malaysia and the world, JPDC does not forget the local community.

“We’ve been given the mandate to ensure that the locals too are involved in the development in Pengerang, creating training opportunities, employment and the chance to become entrepreneurs for those who want to improve themselves and their economic position,” said Mohd Yazid.

JPDC offers training through IKBN Bandar Penawar, with the cooperation of the Youth and Sports Ministry, Petronas and SIRIM-AWS.

The training aims to produce workers within a short period of time and certification that is also recognised by other industries.

Apart from training, JPDC gives the local community a chance to take part in the field of entrepreneurship by holding seminars and courses on marketing and entrepreneurship.

This exposure to entrepreneurship is made available to locals of all ages.

JPDC is also supported by the Johor State Government and Petronas in encouraging the involvement of locals in entrepreneurship.

Other initiatives by JPDC include working with Petronas to promote local cooperatives around Pengerang to grab various business opportunities within the PIPC area. In addition, there are also plans to collaborate with Perbadanan Usahawan Johor Berhad (PUJB) to determine cooperatives that are able to supply services and food to worker camps in the PIPC. — Bernama