KUALA LUMPUR (Nov 18): Dialog Group Bhd (KL:DIALOG) entered into a deal with BP Singapore Pte Ltd on Tuesday that will more than double the storage capacity for refined petroleum products and biofuels at Phase 3 of the group's Pengerang Deepwater Terminals  in Johor.

The long-term service agreement involves Dialog Terminals Pengerang (5) Sdn Bhd and Dialog Terminals Sdn Bhd, with BP Singapore committed as the dedicated customer for the new facilities, said Dialog in a bourse filing.

The group said the expansion marks another milestone in its midstream development strategy and reinforces efforts to position Pengerang as the largest petroleum and petrochemical hub in the Asia Pacific region.

Upon completion by mid-2028, Phase 3's capacity will rise by  614,000 m³ to about one million m³ across 48 tanks. The addition of five new berths is also expected to enhance marine handling capacity and support higher vessel traffic.

Dialog said the expansion will be funded through internal resources and borrowings, with no liabilities assumed except for parental or performance guarantees. While not expected to materially impact financial performance for the year ending June 30, 2026, the group said the development will contribute positively in subsequent years.

Phase 3 of Pengerang Deepwater Terminals was launched in 2018 as part of Dialog’s multi-phase strategy to strengthen its recurring income base. Designed as a one-stop integrated terminal, it offers port and marine operations, storage tank facilities, and shared infrastructure such as deepwater jetties, berth planning, cargo handling and interconnecting pipelines.

The terminal caters to oil traders, multinational oil companies, refineries and petrochemical plants, providing common tankage facilities and deepwater marine infrastructure. Operations commenced in March 2021 for the initial storage capacity of 430,000 m³ with BP Singapore as the long-term customer

Dialog shares closed up one sen or 0.5% at RM1.90, valuing the group at RM10.73 billion. Year to date, the stock has gained 2.7%.