"On July 29, 2020, Sinomart KTS Development LTD, a subsidiary of Sinopec, and PT Batam Sentralindo signed a memorandum of understanding to continue the investment plan for the oil depot development project in Batam, Riau Islands. During the (MoU) signing (ceremony), (representatives of) the Coordinating Ministry for Economic Affairs and BP Batam were present as witnesses and to demonstrate full support of the Government of Indonesia to oversee the realization of this oil depot project," Suswijiono, secretary of the Coordinating Ministry for Economic Affairs, noted in a statement here on Monday morning.
Suswijiono highlighted the full support of the governments of both nations for realizing the project.
The oil depot is expected to bolster the nation's energy sovereignty, especially amid the volatile and vulnerable global conditions owing to the COVID-19 pandemic.
"This agreement is good news. The Indonesian government urges and supports Sinopec to immediately build the project that has been planned since long," he stated.
Construction of the oil depot, with a storage capacity of 2.6 million kiloliters, has been initiated since 2012. The groundbreaking of this project was also conducted on October 10, 2012, on a 75-hectare plot of land in the industrial area of the Westpoint Maritime Industrial Park, Batam.
The oil depot project in Batam is planned to cost US$841 million or over Rp12.19 trillion based on the exchange rate of Rp14,509 per dollar.
The Coordinating Ministry for Economy and BP Batam are serving as mediators for the two companies. The ministry will continue to oversee the preparation process until physical development is conducted immediately.
This project is deemed significant to materialize national energy security and to boost the economy in the midst of the COVID-19 pandemic.
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