Malacca is said to have made plans for allocating a significant amount of money in search of oil. The country eyes slice of Singapore’s pie for this high demand commodity, and aims to build a port that can handle the biggest tankers on the planet.
Reuters reports that the Malaysian state has the ambitious plan to pump nearly $3 billion with the aim to acquire a slice of traffic sailing on to nearby Singapore which is the top but congested trading hub in a region with US$600 billion in annual oil trade, approximately a third of global oil demand.
Ships at Singapore can spend costly time just waiting to deliver or take on goods, refuel or undergo maintenance work. Funded largely by Chinese investors, port operator T.A.G. Marine and developer Linggi Base are building the RM12.5 billion Kuala Linggi International Port (KLIP) to offer storage, repair and refuelling services.
With Singapore’s port ban regarding floating storage and ship-to-ship (STS) transfers, the potential for savings and streamlined business is clear for KLIP users. Using 620 acres of reclaimed land, the port this month launched construction of a port with 1.5 million cubic metres of oil storage capacity, and dry docks to handle the biggest of oil tankers, hoping for completion within a decade.
KLIP is aware business is now dwarfed by Singapore, which handles well over 100,000 vessel calls a year, compared to KLIP’s few thousand per year. Specifically, analysts have estimated that KLIP could handle three times current volumes within a decade.
This project is the latest among others trying to capture a piece of Asia’s rising oil demand. Therefore, officials in Singapore said that growth in oil markets is strong enough to warrant further investment even though some also see significance in Malacca’s project being backed by Chinese investors.
