Construction of Pertamina?s storage facility in Balaraja may be delayed

State owned oil and gas company Pertamina might delay the construction of a new oil storage facility in Balaraja, West Java if its contractor PT Pandan Wangi could not lower its bid, the company?s senior executive has said.

Achmad Faisal, the general manager of Pertamina?s domestic sales for region III (UPDN III), said in Jakarta over the weekend that Pandan Wangi proposed to construct the oil storage facility at total cost of US$99 million.

According to him, the contractor?s construction cost proposal is till too far from Pertamina?s estimate of about $37.5 million.

Achmad said that the project for the construction of 100,000 kilo liter-capacity storage facility could be started as soon as possible if Pandan Wangi agrees with Pertamina?s offer. "But if the contractor refuses the offer, the project might be delayed," he said.

Pertamina plans to build two more oil storage facilities in a bid to speed up the process of the fuel distribution in Jakarta and surrounding areas from the only storage facility in Pelumpang, North Jakarta. The two storage facilities will be built in Cikampek and Balaraja, respectively.

According to Achamad, the Pelumpang fuel terminal which has a capacity of 200,000 kilo liters has been operated at over capacity due to the continued increase in the fuel demand. (*)