The world's second largest petroleum-products storage company Oiltanking will start construction of a 300,000-metric-ton fuel storage facility in Indonesia in January next year, a local newspaper reported Wednesday.

Oiltanking Singapore Ltd., a unit of the giant storage operator,will start operating the facility in 2007, reported The Jakarta Post.

"The groundbreaking will take place in January and the facilitywill be completed within (between) one and one-and-a-half years," the Ministry of Energy and Mineral Resources' Director of Oil and Gas, Erie Soedarmo was quoted as saying.

The storage facility, estimated to cost between 150 - 200 million US dollars, will be the first to be constructed in the country since the government opened up the sector in November.

The facility will be built in the town of Cilegon near Jakarta.

Another multi-national company that is also interested in setting up similar facilities of relatively similar size is the Dutch Royal Vopak NV, said Erie.

"Vopak is currently looking for a local partner and a location to build the facility," said Erie.

He further said that storage operators preferred areas near major ports, such as the Tanjung Priok harbor in Jakarta. "Unfortunately the land prices are high and the (available) areas small," he added.

According to the company's website, Oiltanking owns and operates 71 terminals with a total storage capacity exceeding 11.1 million-cubic-meters in 19 countries.

Vopak operates 79 terminals in 29 countries. In Asia, its businesses are spread out in Singapore, Malaysia, Thailand, South Korea, China, Japan and Pakistan, with services including tank storage for oil products, gases and chemicals.

According to government data, up to November, 17 companies haverequested licenses to build and operate crude and fuel storage facilities. The government has awarded preliminary licenses to 10 of them and a business license to one firm.

Aside from storage, the new oil and gas law also liberalizes other parts of the sector, namely refining, transportation, and retailing.

Source: Xinhua