Dialog Group : China’s CAO ends Johor oil storage terminal project

Dialog Group Bhd (RM2.41/share)
China’s CAO ends Johor oil storage terminal project

China Aviation Oil (CAO), Asia’s top jet fuel buyer, has terminated its plan to build and manage an oil storage terminal in Malaysia, the company said.

In October last year, CAO formed a joint venture with Centralised Terminals, a Malaysian company owned by shipping firm MISC and Dialog Group, to build a 380,000 cubic metre (2.39 million barrels) storage tank terminal in Johor’s Tanjung Langsat Port. It had planned to build and lease all the tankage to store middle
distillates and fuel oil for at least seven years once the storage was ready by end- 2013.

CAO and Centralised Terminals have now mutually decided to terminate the shareholders agreement as certain key conditions would require a much longer time to be met than initially thought, CAO said in a statement.

The company imports more than 90% of China’s jet fuel needs, accounting for about 40% of the country’s total demand.  Its top customers include the nation’s three biggest international airports. – Business Times

Source: Kenanga