KUALA LUMPUR (Nov 19): Dialog Group Bhd (KL:DIALOG) has secured an engineering, procurement and construction (EPC) contract worth about RM1 billion from Pengerang Terminals (Two) Sdn Bhd (PT2SB) to develop new biofuel storage and handling facilities within the Pengerang Integrated Complex.

In a bourse filing, Dialog said the contract was awarded to its wholly-owned subsidiary, Dialog E&C Sdn Bhd (DECSB). The scope of work covers the engineering, procurement and construction of tanks for bio feedstocks and finished biofuel products together with the supporting infrastructure required for storage, transfer and handling operations.

The EPC contract is accompanied by an alliance agreement between DECSB and PT2SB, under which both parties will collaborate on project execution through an integrated project delivery approach.

PT2SB, which owns and operates a dedicated deep-water terminal serving the complex, is jointly owned by Dialog Equity (Two) Sdn Bhd (25%), PRPC Utilities and Facilities Sdn Bhd (40%), Vopak Terminal Pengerang BV (25%) and Permodalan Darul Ta'zim Sdn Bhd (10%).

The new facilities form part of PT2SB’s ongoing expansion, which includes about 272,000 cubic metres of dedicated storage capacity for Pengerang Biorefinery Sdn Bhd under a 25-year take-or-pay terminal usage agreement.

Dialog said the project is scheduled for completion by December 2027, with construction and commissioning activities to be carried out in phases over the next two years.

It also noted that the project reinforces its long-term vision of becoming a leading integrated technical services provider to the energy sector, supported by its EPC and commissioning capabilities, as well as plant maintenance, catalyst handling and fabrication services.

Dialog said the contract will not affect its share capital or the shareholdings of substantial shareholders, but is expected to contribute positively to earnings and net assets from the financial year ending June 30, 2026 onwards.

The company also flagged potential risks, including manpower availability, material price fluctuations and geopolitical or regulatory developments, but stressed that mitigation measures will be implemented throughout the project period.

At Wednesday’s close, Dialog shares were unchanged at RM1.90, valuing the group at RM10.73 billion. Year to date, the stock has gained 2.7%.