Prime Minister Abdullah Ahmad Badawi today launched the construction of a RM1.4 billion regional petroleum hub to be built on a man-made island off Johor.

The Asia Petroleum Hub (APH) is expected to be completed in 2009 and will provide bunkering or storage facilities with a total capacity of one million cubic metres (35.3 million cubic feet).

Abdullah said the project - located at a 40 hectare (0.4 square kilometre) island off Tanjung Bin about 40 kilometres west of Johor Bahru - will complement port services already available in the state.

"APH will complement and enhance the capabilities of Johor Port at Pasir Gudang and Port of Tanjong Pelepas to provide an integrated, comprehensive package to its clients," he said at the ground-breaking ceremony.

"APH will provide uninterrupted bunkering services to liners calling at these ports," Abdullah was quoted saying by the official Bernama news agency.

Provide synergies with IDR

The centre is designed to handle over 30 million metric tonnes of petroleum products as well as accommodate over 3,000 vessels calling at the terminal annually.

The facility is being developed by APH Sdn Bhd, a consortium led by KIC Oil Gas, the country's largest independent terminal operator and a major bunker player.

The prime minister expects the project to provide synergies to the ambitious RM17.7 billion Iskandar Development Region (IDR) in Johor.

The IDR, which was launched in November last year, comprises exclusive residential homes, a logistics hub, a theme park, a waterfront city, a medical hub and an educational city.