SEVERAL local and international companies have expressed interest in building a liquid bulk terminal in Penang Port.

Penang Port Sdn Bhd — the port operator — recently issued a tender notice, which has attracted a number of interested parties. The construction of the terminal at Prai Wharves is estimated to cost a few hundred million ringgit.

The tender closes on April 21. A visit to the site was arranged on March 1.

The companies that have expressed their intent include VTTI Asia, a unit of VTTI which is the storage arm of the world’s largest independent oil trader Vitol; Dialog Group Bhd; China Harbour Engineering Co Ltd (CHEC); BAM International, a subsidiary of Dutch giant Royal BAM Group; and BIV Global Sdn Bhd, a private company linked to tycoon Tan Sri Syed Mokhtar Al-Bukhary.

Penang Port is looking at offering a 35-year concession.

“It’s difficult to determine the price now; it is dependent on so many factors; it’s all about the proposals. Each proposal is likely to be unique and different,” an interested party tells The Edge.

Companies bidding for the tender award must meet requirements that include specialising in oil and gas or energy storage, and being able to develop and operate a liquid bulk terminal. Other key requirements are the ability to obtain financing for the project and obtaining the necessary approvals and licences.

Penang Port in its tender notice says there are nearly 40 acres on which to build the liquid bulk terminal, which include an existing eight-acre plot, an option to reclaim 14.8 acres at the inner basin near the wharves and an additional 17 acres of adjacent land.

There is an extra 4.2 acres for a wharf and access bridge, which will be built by Penang Port.

Basically, the interested party is expected to propose the overall concept and design of the terminal, including constructing and maintaining the tankage and related facilities.

Penang Port is wholly-owned by Seaport Terminal (Johor) Sdn Bhd, a company controlled by businessman Syed Mokhtar, with the Minister of Finance holding a golden share. His flagship, MMC Corp Bhd, in which he has a 51.76% stake via Seaport Terminal, is acquiring a 49% equity interest in Penang Port for RM200 million.

The participation of BIV Global in the tender exercise is a surprise. The company was incorporated and registered on Oct 11 last year, and is seen to be Syed Mokhtar’s new privately owned vehicle.

BIV Global’s directors are Tan Sri Shamsul Azhar Abbas and Datuk Wee Yiaw Hin. Shamsul is an independent and non-executive chairman of MMC, and formerly president and CEO of Petroliam Nasional Bhd. Wee was also with Petronas and retired last year as executive vice-president and CEO of the company’s upstream business. BIV Global’s shareholders are Azman Hanafi Abdullah and Mohamad Abdullah, both holding a share each.

Azman was a director of Seaport Terminal, which is one of Syed Mokhtar’s private ­vehicles, and a substantial shareholder of United ­Malayan Land Bhd, a property company privatised by Syed Mokhtar a few years ago.

With Syed Mokhtar controlling Penang Port, will it be all right for BIV Global to participate in the bid, or will it be deemed a conflict of ­interest due to his shareholding?

While little is known about BIV Global, it is understood that it will generate new businesses related to oil and gas.

Besides BIV Global, there are also BIV Builders Sdn Bhd and BIV Commodities Sdn Bhd.

CHEC, a subsidiary of China Communications Construction Company Ltd, is well known locally for undertaking to build the Sultan Abdul Halim Muadzam Shah Bridge, or Second Penang Bridge. Internationally, some of its related jobs are the grain and fertiliser terminal at Qasim Harbor in Karachi, Pakistan.

BAM International has a long list of achievements, including being involved in the construction of the Aqaba liquefied natural gas terminal in Jordan, Oryx petroleum jetty at Freetown and a fuel unloading and layover facility at Pepel (both in Sierra Leone), iron ore loading berth and wharf extension at Port Hedland in Australia, a container terminal in Moín, Costa Rica and Costa Norte LNG jetty in Panama.

Dialog Group has built tank terminals for the storage and handling of crude oil, chemicals, petrochemicals and petroleum products. Some of its larger tank facilities are the planned deepwater terminal at Pengerang, Johor, where it is building a tankage facility on a 500-acre tract for handling, storing, blending and distributing crude oil, petroleum and LNG products.

Dialog had also constructed storage terminals in Kertih, Terengganu, and Tanjung Langsat, Johor, putting the company in a good running for the Penang Port terminal project.

How lucrative this terminal is remains to be seen.

For its financial year ended December 2015, Penang Port posted an after-tax profit of RM2.22 million from RM399.48 million in revenue. As at end-December 2015, Penang Port had non-current assets of RM1.64 billion, current assets totalling RM174.58 million, non-current liabilities of RM1.32 billion, and current liabilities of RM57.23 million. As at end-2015, Penang Port also had reserves of RM358.13 million.

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