Indonesia offers to host ASEAN oil storage hub

By Calvin Purba

One of the issues discussed during the ASEAN Summit in the Philippines last week was a proposal to develop a regional crude oil storage facility for ASEAN member states.

Energy and Mineral Resources Minister Bahlil Lahadalia said Indonesia had offered to host the proposed regional oil storage hub.

 “This is a good idea. We can build storage anywhere, but yesterday I offered Indonesia. We want to build a large reserve that could eventually supply countries across Southeast Asia,” Bahlil said on Monday (11/5).

The planned storage facility is aimed at strengthening energy security among Southeast Asian countries amid ongoing geopolitical uncertainties.

Apart from the ASEAN crude storage proposal, Indonesia is also planning to develop a domestic oil storage facility in Sumatra as part of efforts to strengthen national energy security.

Previously, Bahlil said the ministry is conducting a feasibility study for a strategic oil storage facility on Nipa Island and aims to begin construction this year.

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He said the storage development plan had been reported to President Prabowo Subianto, who instructed that the project be implemented as soon as possible.

According to Bahlil, expanding oil storage capacity is a critical step to strengthen Indonesia’s energy resilience.

“I have reported to the President and he directed us to immediately start construction. This is about survival. If we want energy security, we must address the core issues quickly so we do not remain dependent,” Bahlil said earlier this month.

He added that investors have already been identified, with funding expected to come from a mix of domestic and international sources.

“The investment will be a blend of domestic and foreign capital, but it will not come from the United States,” he said.

Editing by Reiner Simanjuntak