KLIP inks RM800m dredging agreement with CCCC Dredging Southeast Asia

KUALA LUMPUR (May 24): Kuala Linggi International Port (KLIP) and its related companies have awarded an RM800 million contract to China’s CCCC Dredging Southeast Asia for reclamation works which will lead to the development of a 620-acre island off the coast of Malacca. 

The contract to CCCC Dredging Southeast Asia was firmed up and awarded at the 16th Langkawi International Maritime and Aerospace Exhibition (Lima’23) on Wednesday (May 24), witnessed by Prime Minister Datuk Seri Anwar Ibrahim, Transport Minister Anthony Loke Siew Fook, and KLIP chairman and former Malacca chief minister Tun Khalil Yaakob, among other dignitaries.

CCCC Dredging Southeast Asia is a subsidiary of China’s CCCC Dredging (Group) Co Ltd, one of the largest dredging companies in the world.

CCCC Dredging Southeast Asia pipped four other companies — two other Chinese parties, a Dutch bidder and a Belgian outfit — that were shortlisted from an initial 24 candidates which had expressed interest to build the island.

Dredging at KLIP is likely to commence in the third quarter of the year and will be undertaken in stages.

KLIP group CEO Datuk Hishammudin Hasan said: “This area (KLIP in Malacca) will prosper. Once the expansion project is completed, Linggi Base (the project) will be able to handle ships with a draft of up to 22 metres at the outer berth, and will be equipped with facilities for cargo handling, storage and transhipment. The water depth of the port ranges between 25 and 55 metres within the port limit, making ours one of the deepest ports in the country.”

“Linggi Base will create an economic impact zone of a 100km radius; generate foreign exchange earnings for the nation; create 6,000 to 10,000 new employment opportunities once the expansion is completed,” he added.

In a nutshell, the plan for the 620-acre artificial island involves the development of a 170-acre, 1.5 million cu m tank farm, a 60-acre fabrication yard, a 131-acre shipyard to undertake dry docking, a cargo wharf and a distribution park. The development is estimated to cost RM15 billion, with a gross development value of RM100 billion.

Towards this end, KLIP had in early January this year inked a memorandum of understanding with Anhua Haotong Energy (Shenzhen) Co, for the Chinese company to invest in the development, construction, and operations of the tank farm storage, ship repair yard and fabrication yard.

According to KLIP’s Hishammudin, talks with Anhua Haotong Energy are still ongoing.

KLIP has three licences — firstly to operate a bunkering facility, second as a port of refuge, and third for an industrial port, which is being built now.

As part of its initiative to offer bunkering facilities, KLIP had inked a service agreement with Euronav NV in November 2019. Belgian shipping giant Euronav has a fleet size of more than 70 vessels, and undertakes ship-to-ship transfer activities at KLIP.

Some of KLIP’s clients for its bunkering business include large oil and gas outfits such as BP, Shell, ExxonMobil Corp, Vitol, Petron, Chevron, Eni, Aramco, Trafigura, Repsol, Maersk Tankers and national oil corporation Petroliam Nasional Bhd (Petronas).

Some 100,000 vessels ply through the Straits of Malacca annually, accounting for 75% to 90% of all energy shipments to North Asia. Half of global container cargo and 25% of all oil shipments between the Middle East and Asia, go through the strait.

Some maritime agencies estimate that the number of vessels plying the Straits of Malacca will double to 200,000 by 2030. KLIP’s plan is to secure 3% of the 200,000 vessels slated to ply the waterway.

Source: The Edge