PETALING JAYA: Dialog Group Bhd
has secured an engineering, procurement and construction (EPC) contract with an estimated value of about RM1bil from Pengerang Terminals (Two) Sdn Bhd (PT2SB) for the construction of biofuel storage and handling facilities at the Pengerang Integrated Complex (PIC).
In a filing with Bursa Malaysia, the group said the contract was awarded to its wholly-owned subsidiary, Dialog E&C Sdn Bhd (DECSB), which signed the EPC agreement and an alliance agreement with PT2SB.
PT2SB owns and operates the deep-water terminal serving PIC. Its shareholders are Dialog Equity (Two) Sdn Bhd, a wholly owned subsidiary of Dialog Group, with a 25% stake; PRPC Utilities and Facilities Sdn Bhd, a subsidiary of Petroliam Nasional Bhd, with 40%; Vopak Terminal Pengerang BV, a unit of Royal Vopak, with 25%; and Johor state-owned Permodalan Darul Ta’zim Sdn Bhd with 10%.
PT2SB is expanding and developing a storage capacity of about 272,000 cubic m, which is dedicated to Pengerang Biorefinery Sdn Bhd with a 25-year, long-term take-or-pay terminal usage agreement.
“The project is expected to be completed by December 2027. The estimated value of the EPC contract is approximately RM1bil,” Dialog said.
The EPC scope covers the design, procurement and construction of tanks for biofeedstocks and biofuel products, along with associated infrastructure works.
“Dialog, being the main contractor for PT2SB’s existing facilities, brings synergistic benefits from its EPCC experience at PT2SB’s site and indepth knowledge of Pengerang Deepwater Terminals (PDT) where PT2SB is situated.
“The group will continue to leverage its technical expertise to deliver high-value services. The provision of technical services to support the energy sector is expected to increase opportunities for synergies within Dialog Group.
“This will position Dialog to capture emerging opportunities, support the group’s downstream strategy and contribute to long-term business sustainability,” it said.
Dialog said the contract is expected to contribute positively to its earnings and net assets from the financial year ending June 30, 2026 (FY26) until the project’s completion.
Meanwhile, analysts said Dialog is expected to chart a stronger growth trajectory over the coming years as new long-term storage agreements, improving downstream margins and advancing upstream developments reinforce its earnings outlook.
Dialog’s latest quarterly performance and a fresh long-term tank terminal contract signalled a steady operational base, according to Maybank Investment Bank Research (Maybank IB).
“Dialog announced some good news: first-quarter results for FY26 (1Q26) were in line with stable operating metrics; and a dedicated, long-term tank terminal contract with BP Singapore,” the research house noted.
“Operational metrics in 1Q26 were relatively stable, with tank terminal utilisation rates at more than 90%; and its 50.01%-owned Pan Orient Energy (Siam) Ltd daily average production rate of 1,800 barrels per day (bpd) from 1,900 bpd in 4Q25,” it said.
Maybank IB maintained its “buy” call on Dialog with an unchanged target price of RM2.32. Kenanga Research expects recurring income visibility to strengthen, particularly in the mid-stream business.
It also pointed out new income streams ahead, as Dialog will begin to earn a modest recurring income from Pengerang Terminals via a newly secured 25-year take-or-pay terminal usage agreement, although contributions will only commence in the second half of FY27.
Kenanga Research maintained its “outperform” stance on Dialog with a higher target price of RM2.28 (from RM2.24).
MBSB Research cited Dialog’s expanding role at PDT, noting that “the group is set to expand its PDT operations through a strategic long-term service agreement with BP Singapore”.
It reiterated its “buy” recommendation on Dialog with an unchanged target price of RM2.17.
Hong Leong Investment Bank Research, meanwhile, reiterated its positive stance, stating that it favoured Dialog for its “recurring income portfolio and stable cash flow anchored by its mid-stream segment where the independent tank terminal assets continue to operate above 90%, supported by stable storage rates of around S$6 to S$6.5 per cubic m.”
It has maintained its “buy” call on the counter, with an unchanged target price of RM2.50.
