JOHOR BAHRU, Dec 5 — Malaysia’s newly launched Maharani Energy Freeport in Johor is positioning itself as a deep-water alternative to Singapore, targeting the flow of oil tankers that make up about one-fifth of global crude shipments through the Strait of Malacca, according to Channel News Asia (CNA).
Built on three purpose-built reclaimed islands off Muar, the freeport aims to develop into a zero-tax hub for energy trading, storage, ship-to-ship operations and bunkering.
With natural water depths exceeding 24 metres, it is marketed as one of the few regional locations capable of accommodating fully loaded Very Large Crude Oil Carriers (VLCCs) without dredging.
Shipping and logistics experts told CNA that Maharani faces stiff competition, particularly from Singapore, which remains the dominant regional hub supported by major refineries, regulatory credibility and trading giants such as Shell, Trafigura and Vitol.
Maritime and logistics scholar Nazery Khalid told CNA the launch shows Malaysia’s ambition to compete regionally.
“When you have a big facility like this — offering connectivity and strong tax incentives — it will naturally attract shipping lines, investors and players in the energy sector,” he said.
The freeport spans 3,200 acres, roughly 1,800 football fields, strategically located in the Straits of Malacca.
In 2024, then-trade minister Datuk Seri Tengku Zafrul Abdul Aziz described the project as “strategically positioned right in the centre of the East-West trade route”, five sailing days from China and 28 days from the Middle East.
Experts said Maharani could gain an edge over Singapore due to its deeper waters — up to 24 metres versus Singapore’s 21 metres at Tuas — and less congested shipping lanes, offering potentially shorter waiting times for VLCCs.
Political and economic commentator Nazri Hamdan described its location and depth as a potential “game-changer” for oil trading, storage, bunkering and deep-sea port services.
Maharani’s freeport status and tax incentives, including zero corporate tax for most operators, could make it more cost-effective than neighbouring hubs.
Yet CNA reported experts warning the project must prove operational reliability to compete with established rivals.
Environmental concerns have also been raised. Local fishermen and activists say the reclamation work has depleted seafood catches and damaged the marine ecosystem.
Meenakshi Raman, president of environmental group Sahabat Alam Malaysia, described the launch as reflecting “poor governance” that sidelined local communities.
Despite these challenges, analysts say the freeport could capture spillover demand from regional shipping congestion.
Nazery told CNA: “I’m sure [Maharani] will eventually elevate its offerings to become a one-stop strategic gateway capable of delivering a whole spectrum of energy logistics services to position Malaysia as a key player in the Asia Pacific region.”
