At present, Patra Niaga still rents fuel terminals from various third parties for its operations in Batam, Riau Islands, and Samarinda, East Kalimantan, with a combined capacity of around 75,000 kiloliters to support its fuel-trading and handling businesses.

The plan to acquire Shell’s Gresik Distribution Terminal (GDT), which has a capacity to store 35,000 kiloliters of fuel, will strengthen Patra Niaga’s supply chain in Java while helping parent company Pertamina to operate more efficiently.

“All this time, Pertamina has been using a floating storage terminal to store its aviation fuel for Bali, and the rent is very high,” Patra Niaga administration and finance director Said Reza Pahlevy said on Thursday.

“By using Patra Niaga’s terminal service at the Gresik facility, Pertamina can reduce the rent by 50 to 60 percent.”

Patra Niaga has allocated Rp 1 trillion ($75.08 million) to finance its expansions this year, up from less than Rp 100 billion last year.

More than 50 percent of the allocated funds will be used for the acquisition of the Gresik terminal, while the remainder will be for supporting the first development phase of an industrial estate in Dumai, Riau Islands, measuring 240 hectares.

Within the industrial estate, the company plans to develop an asphalt storage terminal with a capacity of 21,000 tons, an aviation fuel storage tank with a capacity of 2,500 kiloliters and a liquefied petroleum gas (LPG) tank with a capacity of 10,000 tons.

“We have kicked off the development of the asphalt terminal and expect it to commence operations next year,” Patra Niaga president director Gandhi Sriwidodo said.

Furthermore, Patra Niaga has also recently signed an agreement with state-owned port operator Pelindo I to jointly develop some parts of the industrial estate.

Under the agreement, Patra Niaga will build a warehouse and parking area in the industrial estate to cater to Pelindo I’s customers coming to Dumai.

Patra Niaga also plans to build 16 aircraft-fueling depots (DPPUs) near airports located in secluded regions by 2018, 11 of which are expected to be completed by year-end.

The 16 new facilities will add to the existing two DPPUs the company currently operates in Timika, Papua, and in Labuan Bajo, East Nusa Tenggara.

“Previously, when there was no DPPU in Labuan Bajo, there were only two or three flights to the region in a week. Since we built the DPPU, the number of flights has increased by three times. So, such a facility will support the regional economy as well,” Gandhi said.

Gandhi said Patra Niaga wanted to gradually reduce its dependence on the fuel-trading business, which currently accounts for 73 percent of the company’s total revenues, because of the risks that go along with the volatility of global oil prices.

In the first half of 2017, the firm was still able to book an annual increase of around 11.3 percent in its top and bottom line, which stood at $630 million and $39 million, respectively.

Within the next five years, the company is hoping to increase its annual revenues by three times to nearly $4 billion.

In the same period, it also expects the portion of revenues, each from its fuel-trading and services business, to be equal.

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