Developer Breaks Ground on $3B Oil Port on Strait of Malacca

Illustration courtesy KLIP

Published Jan 28, 2024 1:20 PM by The Maritime Executive


Construction of a mega port designed to compete with Singapore has commenced in neighboring Malaysia. Kuala Linggi International Port (KLIP) has broken ground for a $3.2 billion project that has the potential to reconfigure commercial shipping in the busy Malacca Strait, one of the world's busiest shipping lanes.

KLIP, a private company, announced last week that the construction of the state-of-the-art port facility has started after eight years of planning. The massive project, which will be implemented in phases, is designed to transform Kuala Linggi into a global green industrial hub for energy, port and maritime services. The developers plan to focus on bunkering, oil storage and oil transfers, which are all high-demand activities for the area.

The new facility would compete with Singapore for a slice of traffic sailing on the busy Strait of Malacca, which sees about 120,000 ships pass through every year. KLIP contends that the strategic location places the port at the crossroads of major shipping routes.

“The groundbreaking ceremony is a historic milestone for KLIP, a significant step forward in our mission to become a world-class maritime hub. We are not just building a port; we are constructing a symbol of progress, collaboration and innovation in the maritime ecosystem that stimulates economic development and creates opportunities for future generations,” said Tan Sri Noor, KLIP Executive Chairman.

The massive project, which is largely funded by Chinese investors and is the brainchild of port operator T.A.G. Marine and developer Linggi Base, includes the construction of tank storage, a shipyard, heavy industry fabrication yard, hard standing cargo handling area, wharfs and warehousing facilities.

As part of the project implementation, KLIP revealed that China Harbour Engineering Co. will commence reclamation works after being awarded a contract worth $158 million. The amount is part of the $294 million the company intends to spend to develop a 620-acre artificial island off the coast. In the middle of last year, another Chinese company, China Communications Construction Company, was awarded a $174 million contract to carry out dredging works for the reclamation.