Dialog to build biofuel storage facility at Malaysia's Pengerang terminal in SAF expansion

Malaysia's Dialog Group Berhad has announced a $330 million expansion of its deepwater terminal in Pengerang, Johor, to provide dedicated storage and handling infrastructure for sustainable aviation fuel and other renewable fuels, marking a significant step in the country's energy transition strategy.

The investment announced by company in a statement July 30 will be undertaken through Dialog's 25%-owned joint venture Pengerang Terminals, which signed a 25-year take-or-pay terminal usage agreement with Pengerang Biorefinery.

The project will add about 272,000 cu m of new storage capacity and is slated for completion in the first half of 2028. It will be funded through a mix of internal resources and external financing.

PBSB, the biorefinery venture that will use the new infrastructure, is a tripartite joint venture between Petronas Mobility Lestari (42.5%), Italy's Eni through Enilive (42.5%), and Japan's Euglena (15%).

The SAF and renewable diesel plant under construction at the adjacent Pengerang Integrated Complex will be capable of processing 650,000 mt of feedstock annually.

Construction began after a final investment decision was reached last year, with South Korea's Samsung awarded a $955 million contract. The facility is expected to come online by August 2028.

The terminal expansion aligns closely with Malaysia's vision of transforming Pengerang into a leading regional hub for petroleum, petrochemicals and renewable fuels.

PT2SB's existing terminal already supports the Pengerang Integrated Complex with deepwater port access, large-scale jetty infrastructure, and access to global shipping lanes.

Its shareholders are Petronas (40%), Dutch energy storage giant Vopak (25%), Johor state-owned Permodalan Darul Ta'zim (10%), and Dialog (25%).

For Dialog, the expansion underpins its strategy to strengthen midstream assets and diversify its energy portfolio toward low-carbon solutions.

The company said the investment aligns with its broader climate change strategy and supports national and global decarbonization efforts in the transport and aviation sectors.

"This expansion not only supports the commercial rollout of SAF and HVO in Malaysia but also reinforces our long-term strategy to build recurring income through sustainable, commercially viable ventures," the company said in a statement.

The Pengerang Deepwater Terminals, which began operations in 2014, now span over 1,200 acres and house four terminals and three jetties. Around 700 acres of reclaimed land is still available for development.

Dialog aims to position PDT as the largest integrated storage and logistics hub for petroleum and renewable fuels in the Asia Pacific region.

The expansion also coincides with Euglena's decision to increase its stake in the biorefinery joint venture. The Japanese biotech company recently raised its ownership from 5% to 15% by acquiring equal equity from Petronas and Eni, committing $67.5 million toward the stake increase. The move underscores growing investor confidence in the region's emerging biofuel infrastructure.

Platts, part of S&P Global Energy, assessed Asia SAF-Jet fuel spread at $1,130.29/mt July 31, down $17.17/mt day over day.