Kuala Linggi International Port (KLIP): Malaysia’s Global Shipping Hub

As outlined in the 2010 Master Plan on ASEAN Connectivity, improved transport infrastructure is bringing the nations of South East Asia closer to one another within the context of the AEC, facilitating better access for trade, investment, services, tourism and people-to-people exchanges.

The AEC’s infrastructure plans are not only connecting and improving the region’s connectivity, but institutionally, are contributing to reducing policy and institutional barriers. Rules, regulations, and standards will be harmonized, in addition to improving member states’ technical capacity. Better infrastructure will bring the peoples of ASEAN closer to realizing a genuine community, creating a tightly knit region that in turn, will enhance economic and strategic credibility.

For many years now, traffic has been increasing through the Strait of Malacca, the shortest waterway connecting the nations of ASEAN to the rest of the world.

The Strait of Malacca which runs between Indonesia, Malaysia and Singapore, has long been a major gateway for trade to and from Asia, is also one of the narrowest chokepoints in the world. The narrowest point in the strait is only 1.7 miles wide, which creates a natural bottleneck for shipping.

The International Maritime Organization has repeatedly warned of the dangers of a collision and the catastrophic environmental impact this would have.
And the Straits are about to get even more crowded: increased oil and gas production in the United States means that more oil exporters are targeting new customers in Asia and more tankers are sailing for China and elsewhere in East Asia.

Almost half of the world’s total annual seaborne trade tonnage now passes through the Strait of Malacca and the nearby Straits of Sunda and Lombok. As the region’s economies continue to expand so too will Malacca’s economic importance both to Asia and the wider global economy.

Now, a Malaysian company is about to make a major contribution to the region’s shipping infrastructure and the global shipping community by relieving pressure on the Strait of Malacca through an ambitious expansion that will see the creation of global maritime trading hub in Malacca’s Kuala Linggi Port.

On November 1, 2016, T.A.G. Marine, the operator of the Kuala Sungai Linggi Port, launched the second phase of its $4 billion plan to transform and upgrade the facility into the Kuala Linggi International Port (KLIP) using some 620 acres of reclaimed land to provide 1.5 million cubic meters of oil storage capacity, along with dry docks to handle the biggest of oil tankers, aiming for completion within a decade.

TAG Marine and Linggi Base, the port developer, intend to interface existing off-shore services with on-shore services, making KLIP a world-class global green industrial hub for the oil and gas infrastructure, port and maritime services. KLIP will be a fully-fledged one-stop centre including ship repair yard, tank farm, marine fabrication yard, general cargo wharf and other marine supporting services.

“KLIP is directly addressing the IMO’s concerns about the impact on global shipping caused by congestion in the Malacca Strait by mitigating the negative consequences of so many ships waiting for off-shore services,” explains Datuk Wira Noormustafa Kamal Yahya T.A.G. Marine’s Managing Director and CEO.

At Singapore’s port, which is just 200 kilometers away, ships can spend costly time just waiting to deliver or take on goods, refuel or undergo maintenance work, while at the same time posing a potential danger in this over-crowded choke point.

TAG MARINE: THE EXPERIENCE AND EXPERTISE NEEDED TO CREATE KLIP

Set up in March 2000, TAG Marine is a pioneer in the handling of LNG and LPG ship-to-ship offshore transfer in the region, having gained the trust and confidence of more than 50 international companies, among them global oil traders and oil majors.

“I started sailing in 1979 in the merchant marine and I have been to many ports in the world, gaining experience and expertise along the way. Now that I am on the other side of the table, as the port operator, I understand the needs and demands of merchant vessels,” explains Noormustafa Kamal.

Over the last decade, T.A.G. Marine has transformed Kuala Linggi from a minor port used mainly by small traders and fishing vessels into a facility that now attracts the largest ultra-large crude carriers (ULLCs), very-large crude carriers (VLCCs) as well as liquefied natural gas and liquefied petroleum gas ship-to-ship offshore transfers, and Aframax and Panamax ships.

“Kuala Linggi has been tried and tested for 10 solid years. It is now time to take the port to another level and transform it into a full-fledged KLIP,” says Noormustafa Kamal.

Noormustafa Kamal adds that KLIP has the potential to expand into new onshore facilities and meet the growing demands of the global shipping industry as well as the infrastructure needs of ASEAN.

At the same time, the project will reestablish Malacca’s position as one of the busiest trading centres in Southeast Asia, impacting positively on the local economy.

“This port will restore Malacca as a regional hub by leveraging on its natural deep and sheltered waters,” concludes Noormustafa Kamal, adding: “Our vision is based on the wellbeing of the people and we will bring economic value for the community through job creation.”