KA Petra, a Malaysian ship-to-ship (STS) transfer specialist, has signed a Heads of Agreement (HOA) with Hutchison Port Holdings to jointly develop the world’s largest STS transfer hub in the country.

Under the terms of the HOA, KA Petra will have 70% interest in the project, whilst Hutchison Ports will take a strategic 30% stake.

Based on preliminary studies, construction of the STS Hub is estimated to cost USD150 million to USD180 million, and will be funded by a combination of internally generated funds and debt financing. Construction will be done in phases with commencement within the next 12 months.

Dato’ Shahrul Amirul, Executive Chairman of KA Petra Sdn Bhd said, “We embarked on the STS Hub idea 2 years ago, and through the grace and assistance from the Government of Malaysia, our partner Hutchison Ports, our engineering and technical partners, and our very own KA Petra team, we are now realising the STS Hub dream.”

Shahrul commented that the STS Hub will have the capacity to store over 9 million metric tons of petroleum products, and with the International Maritime Organisation implementing IMO 2020, a regulation limiting sulphur content in marine fuels, from 1st January 2020, the STS Hub will be well positioned to become a major trading hub in the region.

The STS Hub is KA Petra’s flagship project and will be located in the Johor Bahru Port waters spanning an area of 2,800 acres. The STS Hub will be able to accommodate 31 berths, making it the largest in the world and will be the first fully dedicated STS transfer facility in the world.

The STS Hub will utilise a state-of-the-art dolphin mooring and berthing concept which will allow the berthing of vessels for the transfer of liquid cargo such as Crude Oil, Fuel Oil, Gas Oil, LNG or other petroleum-based products.

A new ship-to-ship (STS) marine gas oil (MGO) and marine fuel oil (MFO) storage and supply hub will be built off the Port of Tanjung Pelepas in southern Johor, say sources familiar with the matter. It is touted to be the largest in the world.

The construction cost of the hub — to be developed by little-known KA Petra Sdn Bhd, partnering Hong Kong tycoon Li Ka-shing’s Hutchison Port Holdings Ltd — is estimated at RM500 million, a Hutchison Port official tells The Edge.

“KA Petra has been in the STS business since 2005, providing offshore storage and MGO and MFO supply services between vessels in the waters off Port Klang, Selangor, Tanjung Beruas, Melaka, and Tanjung Pelepas, Johor.

“In Johor, it is one of four operators licensed by the Ministry of Transport to provide STS services to vessels coming to the Port of Tanjung Pelepas (PTP) and Port of Singapore,” says the official.

Hutchison Port will have an up to 30% stake in the completed STS hub, the official adds. The project will have a gross development value of RM8 billion to RM12 billion.

A check with the Registrar of Companies shows that KA Petra is a distributor of marine lubricants and provider of shipping and oil and gas-related services. It is almost wholly owned by Datin Lelawati Raffik.

According to RoC, for the financial year ended Dec 31, 2017 (FY2017), KA Petra recorded a 170% year-on-year increase in profit after tax (PAT) to RM2.05 million on revenue of RM336.88 million.

The STS hub will be developed by KA Petra’s wholly-owned subsidiary, KA Petra STS Hub Sdn Bhd, the company in which Hutchison Port will be investing.

The company official says the STS hub will be able to handle up to 30 very large crude carriers (VLCCs) at any given time, compared with the existing STS operation there, which can only handle nine.

The new STS hub will have mooring buoys and “dolphins” to berth the tankers. The usage of dolphins — isolated marine structures for berthing and mooring vessels — enables mother ships to be berthed without the need for large piers or docks.

The current STS operation, where the mother ships — large tankers and crude carriers — are anchored in an offshore area to transfer fuel and other liquid hydrocarbon products onto other vessels without being tied to any permanent structure, is taking up too much space.

This is because VLCCs and their daughter ships — the vessels used to transport liquid hydrocarbon from the mother ships to their destinations — tend to swing due to the ocean currents, explains a source from the maritime industry. The area can only cater for only nine VLCCs at any given time due to the vessel swing factor, the source adds.

The area where the STS hub will be built stretches 2,800 acres between PTP and the Johor Baru port limit.

“With the STS hub being developed, the number of VLCCs that can be moored off PTP will treble to up to 30 at any given time, which will make the waters off PTP the largest STS hub in the world,” the source says.

But is there a need to develop the STS hub? It will raise the volume of oil products traded in Malaysia, which would increase the country’s weightage in the Platts’ Free-on-Board (FOB) Straits pricing of oil products.

In 2014, Platts, the leading global energy, petrochemicals and metals information provider, introduced the FOB Straits benchmark to replace the FOB Singapore and FOB Malaysia oil products reference rate.

These oil products are traded through Singaporean terminals, as well as four Johor ports, namely Tanjung Bin in the southwest, and Pasir Gudang, Tanjung Langsat and Pengerang Independent Terminal in the southeast.

If the STS hub materialises by 2021, Johor’s petroleum product storage capacity will increase further, in line with the federal and state governments’ aspiration to turn the state into one of the largest petroleum products trading hubs in the world.

ATT Tanjung Bin Sdn Bhd (ATB), which operates a petroleum product storage terminal in Tanjung Bin, has a storage capacity of almost one million cu m. ATB is a joint venture between MISC Bhd and Vitol, a leading global petroleum product trading company.

Pengerang, on the southeast coast of Johor, has the largest petroleum product storage capacity in the state. Phase 1 of the Pengerang Deepwater Terminal (PDWT) has a storage capacity of 1.3 million cu m of petroleum products, while Phase 2 has a capacity of 2.1 million cu m.

The PDWT is a joint venture between Dialog Group Bhd, Royal Vopak NV and Johor’s State Secretary Inc for Phase 1, and the three parties plus Petroliam Nasional Bhd for Phase 2.

KA Petra’s STS hub will not have an installed storage capacity, as its capacity depends on the size of the tankers moored at its piers. However, as an illustration, a VLCC can typically carry 300,000 cu m of petroleum products.

PETALING JAYA: KA Petra Sdn Bhd, a homegrown ship-to-ship (STS) transfer specialist, has signed a heads of agreement with Hutchison Port Holdings Ltd to jointly develop the world’s largest STS transfer hub in Johor Baru.

Hutchison Ports, a subsidiary of Hong Kong-headquartered CK Hutchison Holdings, is the world’s leading port investor, developer and operator with a network of port operations in 51 ports spanning 26 countries throughout Asia, the Middle East, Africa, Europe, the Americas and Australasia.

Under the agreement, KA Petra will have 70% interest in the project, while Hutchison Ports will take a strategic 30% stake, according to a joint statement by the both companies yesterday.

Based on preliminary studies, the STS hub construction is estimated to cost between US$150 million and US$180 million (RM611.7 million and RM734.1 million) and will be funded by a combination of internally generated funds and debt financing.

The construction work will be done in phases with commencement expected within the next 12 months.

“We embarked on the STS hub idea two years ago as a solution to address the demand for more STS berthing space. Through the close cooperation from the government, Hutchison Ports, our engineering and technical partners, and our very own KA Petra team, we are now realising the STS Hub dream,” KA Petra executive chairman Datuk Shahrul Amirul said.

The hub is poised to trigger a resurgence of the Malaysian maritime sector, by becoming a catalyst to other related businesses in the industry.

Shahrul added the hub and related businesses will attract many highly skilled Malaysians, who are overseas, to return to Malaysia and provide skills and training to the next generation of professionals in the maritime industry.

The STS Hub will have the capacity to store over nine million tonnes of petroleum products and with the International Maritime Organisation implementing IMO 2020, a regulation limiting sulphur content in marine fuels from Jan 1, 2020, the STS hub will be well positioned to become a major trading hub in the region.

“Overall, KA Petra estimates that gross domestic product (GDP) contributions from maritime sector activities in the STS hub will be in the region of RM18 billion to the Malaysian GDP annually, equivalent to 1.5% of Malaysia’s GDP today,” he added.

PETALING JAYA: The first piling works for the world’s largest ship-to-ship (STS) hub off the waters in Johor could start in the second half of this year.

STS operator and marine services provider KA Petra Sdn Bhd has started to tender out the works while awaiting the final green light from the government.

It requires approvals for the environmental impact assessment (EIA) and the social impact assessment (SIA) – both of which have been submitted to authorities – before physical work can start for the hub, which could accommodate the berthing of 30 vessels at any one time.

The company had recently obtained an approval in principle from the Transport Ministry for the development, which came with three conditions – rights to use the sea bed from the National Security Council, an EIA and an SIA.

While waiting for final go-ahead, KA Petra is concurrently running a tender for the construction work which ends this Thursday where a contractor will be shortlisted within a month.

The project is a joint venture between KA Petra and world-renowned Hutchison Ports Holdings Ltd in which KA Petra will hold 70% while the latter will hold a strategic 30%.

KA Petra executive chairman Datuk Shahrul Amirul(pic below) is almost certain that construction works could start after receiving the final approval as initial financing would be through self-funding.

“Even during the movement control order (MCO) period, we are working with the government towards making this happen very quickly after the MCO is lifted, ” he told StarBiz.

The project’s cost was estimated to be in the range of US$150mil (RM650mil) to US$180mil (RM785mil), which will be funded by equity from KA Petra and Hutchison and also bank financing.

There could, however, be a revision in construction costs in light of the declining steel prices.

KA Petra will provide its equity portion first, which will be sufficient for six months. It had also secured support letters from banks and the process is ongoing.

“Hutchison is a very notable name and they’re in 53 ports globally. They see potential in this business. We went to them because there is a strategic partnership, with them owning all these ports and having good ties with shipowners.

“These shipowners use bunkers and the STS hub caters for bunker business. So the strategic alliance is very important, ” he said.

Pre-MCO, it was estimated that the project would be completed in between 16 and 18 months.

But taking into consideration the feedback received and when it closes the tender, Shahrul said it could be stretched to 24 months for all 30 berths to be built.

The hub could very well come into operation as early as next year, starting with some completed berths.

KA Petra wasted no time in ensuring that the hub would be fully utilised upon completion by inking memorandums of understanding for all its berths with its prospective customers, which will be converted into long-term contracts once the company obtains the final approval.

The nature of the STS hub business and the engagement with the customers is in the form of long-term leases for the berth that may be extended up to 10 years.

That would be the fixed revenue for the business. The variable revenue will come from its services to cater for the increasing demand in the bunker market.

This will come from the increasing capacity of ports along the Straits of Malacca, including Singapore’s Tuas mega port which will be able to handle 65 million twenty-foot equivalent units per annum.

With the development in the oil and gas sector where oil prices have plunged and with the current economic downturn, the notion was businesses would be bad for marine-based companies such as the STS hub.

According to Shahrul, it is not exactly so, as the hub is basically a floating storage and it is something highly in demand in times like this, far exceeding what is available.

“People use STS to float their cargo so they can break bulk to go to places with shallow draft.

“We saw the West Texas Intermediate price went below negative and those who bought oil at the beginning of the year cannot sell because they would be making losses, so they need to store.

“And when this happens, all the tanks are full and the next alternative will be floating storage. Even the likes of Pertamina (Indonesia’s state-owned oil and gas company) are sourcing out for vessels, ” he said.

Asked if the STS might miss the boat when the supply and demand of oil is back to normal, Shahrul said the STS worked both ways, for storage and port services.

“The pilots, mooring master and tugboats, these are all part of our port services. So the STS is not only storage revenue, it’s also service revenue. The hub is basically to cater for the bunker market and demand is already there.

“In a nutshell, the STS business is something that can work when the oil price is up or down. When it’s at the peak, people will sell and you need the STS for the proximity and fast turnaround. When it’s low, they need to store and this is the fastest way, ” Shahrul said.

The STS hub, when completed, will be able to store up to 9 million tonnes of petroleum products at its 30 berths, which could cater up to 30 very large crude carriers with a 300,000 tonne storage capacity each.

Studies have shown that the hub and its spillover effect could create about 2,300 new jobs and the gross domestic product contribution from the hub itself would be about RM428bil over 30 years.

Asked if the STS might miss the boat when the supply and demand of oil is back to normal, Shahrul said the STS worked both ways, for storage and port services.

“The pilots, mooring master and tugboats, these are all part of our port services. So the STS is not only storage revenue, it’s also service revenue. The hub is basically to cater for the bunker market and demand is already there.

“In a nutshell, the STS business is something that can work when the oil price is up or down. When it’s at the peak, people will sell and you need the STS for the proximity and fast turnaround. When it’s low, they need to store and this is the fastest way, ” Shahrul said.

The STS hub, when completed, will be able to store up to 9 million tonnes of petroleum products at its 30 berths, which could cater up to 30 very large crude carriers with a 300,000 tonne storage capacity each.

Studies have shown that the hub and its spillover effect could create about 2,300 jobs and the gross domestic product contribution from the hub itself would be about RM428bil over 30 years.

KA Petra Sdn Bhd announced plans to build a 50,000-tonne-per-year lube blending plant in Malaysia, following the company’s appointment as a distributor for Gulf Oil lubricants in Malaysia.

The agreement with Gulf Oil International was signed yesterday during the Malaysia World Maritime Day 2016 Conference and Exhibition at the Kuala Lumpur Convention Centre.

Datuk Shahrul Amirul, founder and managing director of KA Petra Sdn Bhd, said negotiations for the lube blending plant are already underway. Details of the lube blending plant will be announced later, he added.

Gulf Oil lubricants are currently produced in Singapore and shipped to Malaysia.

KOTA KINABALU: Sabah Ports Sdn Bhd held a signing ceremony to commemorate the leasing of Sapangar Bay Oil Depot (SBOD) to oil and gas segment provider, KA Petra Sdn Bhd (KPSB). The facility shall act as a supply hub for diesel and bitumen distribution, catering particularly for domestic consumption as well as for South East Asia demands.

Under the partnership, Selangor based KPSB will lease the depot for a period of 20 years from Sabah Ports, in which KPSB intends to position SBOD as an export gateway to greater Asia and ASEAN, particularly the BIMP EAGA economic zone.

“KPSB is strengthening its position as an integrated service provider to the oil & gas industry, and a key strategic thrust of KPSB’s master plan is the establishment of an asset-based operation for distribution of petroleum products. With the signing of the 20-year tenancy agreement, a key step towards this master plan was achieved,” said Kannan Annamalai, Chief Operating Officer for KPSB.

He added, “KPSB’s investment to operate the SBOD for 20 years underlines its long term commitment and active participation to develop Sabah into an economic gateway to ASEAN.”

The tenancy agreement includes an undertaking from KPSB to increase the depot’s capacity from its current 30, 000 metric ton (MT) to 100, 000 MT within five years. The upgrade is to commensurate with the company’s forecasted trading volume based on secured contracts and potential business.

“The business of Sabah Ports and KPSB are closely related and integrated. As Sabah Ports actively seeks to diversify and expand its business, we are confident that KPSB’s capabilities will complement Sabah Ports’ business plans,” said Mohd Sahid Hj. Nawab Khan, Sabah Ports Chief Operating Officer.

“As the demands of the oil and gas industry increase, Sapangar Bay Oil Terminal’s capabilities will be upgraded to accommodate bigger tankers and cater for greater volume. The opportunity for both parties to develop value-added services to complement this expansion is something to look forward to,” he added, referring to Sapangar Bay Oil Terminal’s jetty expansion scheduled to take place this year.

Sabah Ports currently operates eight ports and several oil jetties, which includes Sapangar Bay Oil Terminal in Kota Kinabalu, Sg. Mowtas Oil Jetty and Karamunting Oil Terminal in Sandakan, Tanjung Batu Oil Jetty in Tawau and palm oil jetties in Lahad Datu and Kunak.

Standing in as witnesses to the ceremony were Dato’ Shahrul Amirul, KPSB’s Managing Director as well as Ng Kiat Min, Suria Capital Holdings Berhad’s Group Managing Director cum Managing Director for Sabah Ports. –(PR)

Sabah Ports Sdn Bhd held a signing ceremony to commemorate the leasing of Sapangar Bay Oil Depot (SBOD) to oil and gas segment provider, KA Petra Sdn Bhd (KPSB). The facility shall act as a supply hub for diesel and bitumen distribution, catering particularly for domestic consumption as well as for South East Asia demands.

Under the partnership, Selangor based KPSB will lease the depot for a period of 20 years from Sabah Ports, in which KPSB intends to position SBOD as an export gateway to greater Asia and ASEAN, particularly the BIMP EAGA economic zone.

“KPSB is strengthening its position as an integrated service provider to the oil & gas industry, and a key strategic thrust of KPSB’s master plan is the establishment of an asset-based operation for distribution of petroleum products. With the signing of the 20-year tenancy agreement, a key step towards this master plan was achieved. “said Mr. Kannan Annamalai, Chief Operating Officer for KPSB.

He added “KPSB’s investment to operate the SBOD for 20 years underlines its long term commitment and active participation to develop Sabah into an economic gateway to ASEAN.”

The tenancy agreement includes an undertaking from KPSB to increase the depot’s capacity from its current 30, 000 metric ton (MT) to 100, 000 MT within 5 years. The upgrade is to commensurate with the company’s forecasted trading volume based on secured contracts and potential business.

“The business of Sabah Ports and KPSB are closely related and integrated. As Sabah Ports actively seeks to diversify and expand its business, we are confident that KPSB’s capabilities will complement Sabah Ports’ business plans.” said En. Mohd Sahid Hj. Nawab Khan, Sabah Ports Chief Operating Officer.

“As the demands of the oil and gas industry increase, Sapangar Bay Oil Terminal’s capabilities will be upgraded to accommodate bigger tankers and cater for greater volume. The opportunity for both parties to develop value-added services to complement this expansion is something to look forward to.” En. Mohd. Sahid added referring to Sapangar Bay Oil Terminal’s jetty expansion scheduled to take place this year.

Sabah Ports currently operates 8 ports and several oil jetties, which includes Sapangar Bay Oil Terminal in Kota Kinabalu, Sg. Mowtas Oil Jetty and Karamunting Oil Terminal in Sandakan, Tanjung Batu Oil Jetty in Tawau and palm oil jetties in Lahad Datu and Kunak.

Signing the tenancy agreement on behalf of KPSB was En. Kannan Annamalai, while En. Mohd Sahid Hj. Nawab Khan acted as signatory for Sabah Ports.

Standing in as witnesses to the ceremony were Dato’ Shahrul Amirul, KPSB’s Managing Director as well as Ms. Ng Kiat Min, Suria Capital Holdings Berhad’s Group Managing Director cum Managing Director for Sabah Ports.

Gulf Oil International Ltd has signed a preliminary agreement with KA Petra Sdn Bhd in hopes of leading to a full partnership for the distribution of Gulf Oil lubricants in Malaysia.

The Massachusetts, US-based oil company said the partnership intends to take advantage of the sizeable domestic market and KA Petra’s well-established business relationship with Gulf Oil Marine Ltd in Malaysia.

It is also part of Gulf Oil’s long-term strategy in the region, a press release on the agreements yesterday noted.

Following the preliminary agreement, KA Petra will now begin the process to become responsible for the primary distribution of Gulf Oil’s products in the country.

The company’s lubricants cover passenger and commercial vehicles, motorcycles, industrial and agricultural segments as well as marine products, which KA Petra is already distributing.

The Malaysia World Maritime Day 2016 Conference and Exhibition in Kuala Lumpur saw SafeSTS formalise a partnership agreement with KA Petra SDN BHD to strengthen the provision of ship-to-ship transfer services in Malaysia, and to develop a pool of trained Malaysian Mooring Masters.

As a one-stop marine services provider to the oil and gas and maritime industries, KA Petra is the permit holder for the largest number of ship-to-ship transfer locations in Malaysia.

From its headquarters in Diss, Norfolk, SafeSTS operates a global network of lightering services, carrying out ship-to-ship transfer of oil, gas and dry cargo, and this new agreement with KA Petra is an indication of its high reputation in the lightering sector.

SafeSTS Managing Director Yvonne Mason, who attended at the Conference, is very pleased with this new agreement, saying: “At SafeSTS we’re committed to the highest standards of safety. We are an established team with over 30 year’s expertise and experience, and are contracted by many leading oil companies and commodity traders worldwide.

“SafeSTS has a well-deserved reputation for integrity and reliability, and is committed to raising the safety standards of ship-to-ship transfer; health and safety is at the forefront of everything we do. All operations are carried out in strict compliance with international guidelines and with marine pollution legislation. These are qualities clearly appreciated by KA Petra, and we are looking forward to working side by side with the company to strengthen its STS related services in Malaysia.”

Since 2010 SafeSTS has transferred over 300 million barrels of oil with no spills.

Source: SafeSTS

KUALA LUMPUR: KA Petra Sdn Bhd plans to build a 50,000-tonne-a-year lubricant blending plant in Malaysia following the company’s appointment as a distributor for Gulf Oil lubricants in Malaysia.

KA Petra Sdn Bhd founder and managing director Datuk Shahrul Amirul said details of the plant would be disclosed later as negotiations were still ongoing.

Currently, Gulf Oil lubricants are produced and shipped to Malaysia from Singapore, he told reporters after signing a partnership agreement with Gulf Oil International Ltd at the Malaysia World Maritime Day 2016 Conference and Exhibition here yesterday.

The agreement would facilitate the distribution of passenger and commercial vehicles, motorcycles, industrial and agricultural and marine products lubricants by KA Petra Sdn Bhd in Malaysia. – Bernama