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tate-owned port operator PT Pelabuhan Indonesia (Pelindo) III has spent Rp 141.7 billion (US$12.75 million) to develop a new yard for liquid bulk purposes at Gresik Port in East Java to help accommodate surging demand in oil, gas and crude palm oil (CPO) industries in the province.

Pelindo III spokesman Edi Priyanto said that the new 210 meter yard and its facilities would allow the port to handle up to 500,000 tons of liquid and chemical materials annually.

'€œWe are expanding the port'€™s liquid bulk facility because of the high demand in several industries based in Gresik. We will also install more new fixed cranes early next year to help smooth loading and unloading activities of liquid materials at the port,'€ Edi said on Tuesday, adding that Pelindo III would commence operation of the new yard in the near future.

The firm has Rp 38.3 billion in additional spending for installing four fixed cranes.

Edi said that the firm had started the expansion project of Gresik Port, which had also been a supporting port for the country'€™s second largest sea gateway, Tanjung Perak Port in the provincial capital Surabaya, since the first quarter of 2013.

The yard'€™s drafts were built 12 meters and 9 meters deep so that both large tankers such as Panamax, Aframax and Long Range 1 (LR1), and smaller tankers like Seawaymax and general purpose tankers, could enter the port.

In addition, Pelindo III also installed a liquids pipeline system in the new yard to increase the port'€™s efficiency in handling liquid products entering the port.

'€œThe new pipeline system will be able to distribute liquid products directly from the vessels to the location of a specific industry. This will make loading and unloading activities reach 100 tons per hour,'€ Edi said, adding that through conventional methods, the work would take 70 tons of liquid materials per hour.

The conventional way of distributing materials from the port to the various location was by transporting it by tank cars. But before that, the liquid had to be moved from the tankers to the port'€™s depot.

Edi also said that the expansion project had enticed some companies to collaborate with Pelindo III.

The firm has just signed a contract agreement with pertochemical company PT Petro Oxo Nusantara that will supply 120,000 tons chemical materials per year at Gresik port'€™s new yard starting in 2014.

Pelindo III is also in negotiations with palm oil producer PT Karya Indah Alam Sejahtera, which could potentially supply 300,000 tons of palm oil annually to the port.

According to Pelindo III data, container traffic passing through the 15 ports it manages has reached 3.01 million twenty-foot equivalent units (TEUs) in the first nine months of the year, up from 2.8 million TEUs in the same period last year.

Tanjung Perak remains the largest contributor to the company with 2.2 million TEUs containers as it is a hub port distributing goods from western Indonesia to the east as well as locations abroad, such as Singapore.

Edi said that the firm was optimistic that the traffic would hit 4 million TEUs by the end of 2013.

Apart from Gresik and Tanjung Perak, Pelindo III among others manages Tanjung Emas Port in Central Java, Benoa Port in Bali, Trisakti Port in South Kalimantan and Tenau Port in East Nusa Tenggara.