1. INTRODUCTION

Dialog Group Berhad ("DIALOG") is pleased to announce that DIALOG's indirect wholly owned subsidiary, Dialog Terminals Langsat (3) Sdn. Bhd. ("DTL3") will be expanding its storage facilities for an additional 150,000 m3 storage for renewable and petroleum products at its terminal in Tanjung Langsat, Johor Darul Ta'zim, Malaysia ("the Expansion"). The first 100,000 m3 is dedicated to EcoCeres Limited, a subsidiary of EcoCeres Inc. ("EcoCeres") and the remaining 50,000 m3 is expected to be leased to third party customers such as multinational companies and trading houses. The Expansion is expected to be completed in Q1 FY2027.

DTL3 secured a take-or-pay storage agreement with EcoCeres Limited for the dedicated 100,000 m3 of storage which serves as a catalyst for the expansion of DTL3 terminal. The said agreement follows EcoCeres' announcement of a significant investment in a new production facility in Pasir Gudang, Johor Darul Ta'zim, Malaysia. The new biorefinery is expected to be operational in the second half of 2025 and is strategically located less than 1km from DTL3 with direct connection to DTL3's storage tanks via rundown pipelines.

The biorefinery will produce Sustainable Aviation Fuel ("SAF") and Hydrotreated Vegetable Oils ("HVO"), which will be stored in DTL3's dedicated (to EcoCeres) tanks. The facility has an annual capacity of up to 350,000 tonnes. DTL3 storage optimises biorefinery's investment in storage infrastructure while logistical integration of rundown pipelines enhances operational efficiency.

EcoCeres is a pure-play renewable fuel producer, with over a decade of experience in biomass utilization, backed by international investors Bain Capital and Kerogen Capital, Founded with a mission to address the challenges of climate change, EcoCeres has earned a reputation as a global innovator in the conversion of waste-based biomass into biofuels, biochemicals, and biomaterials. As an International Sustainability and Carbon Certification ("ISCC")-certified decarbonization solution provider, the company stably produces industrial scale SAF and HVO through its proprietary processes.

Rationale and Prospects

This development is in response to growing investor interest in low-carbon fuel alternatives and DIALOG is expanding its terminal operations to cater for such sustainable and renewable fuel products, in addition to existing storage of petroleum and petrochemical products.

Bulk fuel storage terminals have an opportunity to become principal facilitators of the energy transition by helping to develop new low-carbon lines of products and services. Terminals could also play a pivotal role in the transport and logistics of newer, emerging product lines like biodiesel, sustainable aviation fuel and their associated feedstock. In essence, this gives terminals a new lease on life and new value in the energy transition, while retaining their traditional role as the gateway to energy trading. Potential users include biofuel production companies, energy trading houses, multinational energy companies and others.

The development of storage facilities for sustainable and renewable products is in line with low-carbon economy transition under DIALOG's Climate Change Strategy as part of ongoing efforts to expand product and solution offering to support the growth and development in the sustainable and renewable sector. This development is also a continuation of the initiatives by the Group to achieve business sustainability and fulfill its Environmental, Social and Governance agenda through commercially viable ventures.

In addition, the strengthening of the midstream capabilities will lead to an increase in DIALOG's sources of sustainable and recurring income in the future and reinforces DIALOG's position as a leading integrated technical services provider.

DIALOG will remain focused and steadfast in the pursuit of diversification across the upstream, midstream and downstream energy sector as well as the sustainable and renewable sector to strategically position the Group to weather different economic and oil price cycles, which is in line with the Group's strategy of generating long term recurring income.

2. DETAILS OF THE EXPANSION

2.1 SCOPE OF WORK

DIALOG will undertake the engineering, procurement and construction of the storage facilities for sustainable and renewable fuel products with a storage capacity of 150,000 m3 connected to existing marine facilities.

2.2 THE EXPANSION PERIOD

The engineering and construction of the Expansion will commence immediately and is expected to be completed in Q1 FY2027.

2.3 INFORMATION ON DTL3

Dialog Terminals Langsat 3 ("DTL3") is an operating terminal with storage capacity of approximately 230,000 m3 (inclusive of the 24,000 m3 under construction) serving short to medium term energy traders and multinational companies storing energy products. It is located adjacent to two other terminals i.e. DIALOG Terminals Langsat 1 and DIALOG Terminals Langsat 2. With the Expansion, the combined storage capacity of DTL1, DTL2 and DTL3 will surpass 1 million m3.

2.4 INFORMATION ON ECOCERES

EcoCeres Limited is a subsidiary of EcoCeres Inc. ("EcoCeres"). EcoCeres is a pure-play renewable fuel producer, with over a decade of experience in biomass utilization, backed by international investors Bain Capital and Kerogen Capital. Founded with a mission to address the challenges of climate change, EcoCeres has earned a reputation as a global innovator in the conversion of waste-based biomass into biofuels, biochemicals, and biomaterials. As an International Sustainability and Carbon Certification ("ISCC")-certified decarbonization solution provider, the company stably produces industrial scale Sustainable Aviation Fuel ("SAF") and Hydrotreated Vegetable Oils ("HVO") through its proprietary processes.

3. FINANCIAL EFFECTS

The Expansion is not expected to have any effects on the share capital and substantial shareholders' shareholding of DIALOG and is not expected to have any material effects on the earnings, net assets and gearing of DIALOG for the current financial year ending 30 June 2025. However, it is expected to contribute positively to the future earnings of DIALOG group.

4. RISKS

Risk factors affecting the Expansion include but are not limited to execution risks, such as availability of skilled manpower, technical expertise and materials, changes in prices of materials, and changes in political, economic and regulatory conditions. Nevertheless, DIALOG will undertake all the necessary efforts to mitigate the various risk factors identified.

5. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS' AND PERSONS CONNECTED WITH THEM

In so far as the directors of DIALOG are able to ascertain, none of the directors of DIALOG, major shareholders of DIALOG and/or persons connected with them have any interest, whether direct or indirect, in the Expansion.

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