PETALING JAYA: Dialog Group Bhd
’s earnings are likely to improve on the back of more jobs.
CGS International (CGSI) Research said in a report to clients that the integrated technical service provider for the energy sector’s January to June 2025 profits are likely to improve due to several refinery and petrochemical plant turnaround jobs scheduled.
It also said the company looked set to exit the long drought of tank terminal contracts with a big project for Indonesia-based ChemOne on the horizon, which is a rerating catalyst, in its view.
“We also expect Dialog to make a final investment decision on the Baram Junior Cluster upstream development in early 2025,” said the research house. It has reiterated its “add” call on Dialog with a target price of RM2.61.
Elaborating, the research house noted that Indonesia-based petrochemical producer ChemOne, the sponsor of the Pengerang Energy Complex (PEC) project at Pengerang, Johor had posted on LinkedIn recently that it had hosted financiers from around the world in Kuala Lumpur to “finalise the project financing” for the PEC project, with “strong support from the senior financiers” including the Export-Import Bank of Malaysia Bhd.
“The senior financiers and their advisers gathered from the United States, United Kingdom, Europe, Kingdom of Saudi Arabia, United Arab Emirates, Singapore, Hong Kong, South Korea and Japan.”
ChemOne said that it hoped to “achieve financial close for the PEC project by the first quarter of 2025” and “groundbreaking the next year”. It noted that PEC involves the construction of a 150,000 barrels per day (bpd) condensate refinery, with the output a mix of transportation fuels and downstream upgrading into paraxylene, among other petrochemicals.
The PEC refinery’s nameplate processing capacity is half of the 300,000 bpd crude oil refining capacity of the Pengerang Refining Co, which is a 50:50 joint venture (JV) between PETRONAS and Saudi Aramco.
“We think the petrochemical capacity could also be smaller than the production capacity of Pengerang Petrochemical Co, which is a 50:50 JV between PETRONAS Chemicals and Saudi Aramco.
“The PEC refinery, if it is built, will be positive for Dialog’s Pengerang Deepwater Terminal as we believe Dialog will most likely enter into a new long-term take-or-pay tank terminal leasing contract with ChemOne.”
CGSI Research said downside risks to its call include any unexpected dragging out of engineering, procurement, construction and commissioning losses.
