KUALA LUMPUR (July 29): Dialog Group Bhd (KL:DIALOG) said it is adding 150,000 cubic metres of storage for renewable and petroleum products at its Terminal Langsat 3 (DTL3) in Tanjung Langsat, Johor.

Some 100,000 cubic metres will be dedicated to EcoCeres Ltd, a subsidiary of EcoCeres Inc, while the remaining 50,000 cubic metres are expected to be leased to third-party customers such as multinational companies and trading houses, said Dialog in a filing with Bursa Malaysia on Monday.

The filing did not disclose the financial details of the expansion plan, which will commence immediately and is expected to be completed by the first quarter of 2027.

Dialog said its indirect wholly-owned subsidiary, Dialog Terminals Langsat (3) Sdn Bhd, secured a take-or-pay agreement with EcoCeres for the 100,000 cubic metres of storage, which will be used for storing sustainable aviation fuel and hydrotreated vegetable oils from their new biorefinery in Pasir Gudang, Johor. The biorefinery is expected to be operational in the second half of 2025.

This development is in response to growing investor interest in low-carbon fuel alternatives, including new storage for sustainable and renewable fuels alongside existing petroleum and petrochemical products, Dialog said.

By developing facilities for biodiesel and sustainable aviation fuel, Dialog aims to support the energy transition and enhance its midstream capabilities.

"The strengthening of our midstream capabilities will lead to an increase in the group's sources of sustainable and recurring income in the future and reinforces our position as a leading integrated technical services provider," the group said.

DTL3's total capacity currently stands at 230,000 cubic metres,  including the 24,000 cubic metres under construction. It is located adjacent to Terminal Langsat 1 (DTL1) and Terminal Langsat 2 (DTL2).

With the expansion, the combined storage capacity of DTL1, DTL2, and DTL3 is expected to surpass one million cubic metres.

Dialog shares fell by two sen, or 0.84%, to RM2.36 at the close on Monday, giving the group a market capitalisation of RM13.32 billion.