Indonesia has granted permission to PT Surya Mina Asinusa for construction of oil storage facilities on Nipah Island in an attempt to prevent the island from erosion.
Expected to have a storage capacity of 1.5 million m3, the project will use 52ha of reclaimed land on the island.
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Surya Mina Asinusa general manager Andi Tan was cited by the Jakarta Post as saying that the company had been using a 20ha portion of the Nipah island in cooperation with Indonesia Maritime Affairs and Fisheries Ministry for developing the oil storage facility.
Expected to cost around $500m, the facility will support oil storage from the Middle East to meet both domestic needs of the country as well as exports.
Andi said: "We are in the process of finalising the engineering and design specifics of the new facility."
The ministry intends to sign a Build Offer Transfer (BOT) contract with Surya Mina Asinusa for construction of the facility. The contract is likely to have a duration of 30 years.
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By GlobalDataNipah Island has a total area of 60ha. Located in Batam municipality region, the island can be reached in nearly 15 minutes from Singapore by boat.
Indonesia has been trying to cooperate with private sector entities to save the island from erosion for long and the oil storage project is part of the plan.
Indonesia coordinating Maritime Affairs Minister Indroyono Susilo said: "The erosion could see Nipah nearly disappear.If it vanishes, we may lose some of our territorial waters.
"So, we reclaimed 60 hectares in 2014 following the former president Megawati’s instructions from 2004."
