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Royal Vopak says that, together with its joint venture partners, it intends to expand the Pengerang Independent Terminals Sdn Bhd (PITSB) storage facility in southern Malaysia in order to meet increased demand for low-sulphur marine fuel as a result of the upcoming 0.5 percent global cap on sulphur content in 2020.

PITSB is to be expanded by 430,000 cubic metres (cbm), bringing the facility's total capacity to 1.7 million cbm.

The expansion, which is subject to final formalities, is expected to be commissioned progressively from Q1 2019.

PITSB provides storage, blending and distribution services for crude oil and clean petroleum products, and is able to handle very large crude carriers (VLCCs).

In total, 24 new tanks will be built ranging from 10,000 cbm to 25,000 cbm. In addition to the extra capacity, one extra berth will be built, bringing the total number of operating berths to six.

The Pengerang region is strategically located at the southeastern-most tip of Johor, along the international shipping routes, and close to Singapore, Asia's main oil trading centre, where there is a growing need for storage capacity. PITSB is an approved terminal that can be nominated for Platts FOB Straits offers.

Vopak said there was a "growing need for low sulphur diesel/gasoil as a result of the global low sulphur requirement for shipping (active by 2020) as set by the International Maritime Organisation (IMO)", whilst also explaining that there was a need to provide additional gasoline and jet fuel capacity.

"This expansion of PITSB is aligned with Vopak's strategy to invest in strategic hub locations," the company added.