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n internal dispute between Chinese oil giant Sinopec and its local partner has put at risk an investment in Batam, Riau Islands, that would facilitate the building of significant facilities for Southeast Asia.

Sinopec Kanton Holding Ltd., which has pledged Rp 8 trillion (US$598.44 million) to construct a depot and refinery on Janda Berhias Island, has reported its local partner, PT Mas Capital Trust (PT MCT), to the Indonesian Consulate General in Guangzhou for allegedly boycotting the construction.

PT MCT, the owner of the island where the facilities will be built, is reporting the Chinese firm to the International Court of Arbitration for appointing one of its subsidiaries, as the project leader for the construction of the depot.

PT MCT has also accused directors of Sinomart KTS Development Ltd., the oil firm’s trading arm that oversees the project, of embezzling $23 million from the total investment.

An adviser to Sinomart, Oesman Hasyim, said the construction of the oil depot with a capacity of 2.6 million cubic meters had been delayed and was at risk of being canceled because of the internal conflict.

“The problem has been reported and handled by the central government’s economic policy implementation effectiveness and acceleration task force, and will be resolved this year,” Oesman told The Jakarta Post on Wednesday.

He said the depot was claimed to be the biggest in Southeast Asia and would work to accommodate oil from Sinopec’s fields in Africa and the Middle East.

“If realized, the project will absorb 4,000 workers,” said Oesman, expressing hope that the government would be able to decide on the issue soon.

Sinopec is among foreign investors that have supported the government’s mission to improve energy security by establishing local oil refineries.

In November 2014, Pertamina launched a large-scale plan to upgrade and expand several of its existing refineries and signed deals with Sinopec, Japan’s JX Nippon Oil and Energy as well as Saudi Aramco.

The plan got off to a rocky start with Sinopec and JX pulling out, but picked up speed in May 2016 when Pertamina and Aramco announced they were awarding an engineering and project management services contract to upgrade the Cilacap refinery, Pertamina’s largest, to Amec Foster Wheeler Energy.

Oesman said the internal conflict should not exist and should have been settled for the sake of the investment. “We want the problem to be solved soon,” he said.

A lawyer for PT MCT, Defrizal Djamaris, said the conflict was being handled by the international court. “We have no intention of halting Sinopec’s investment in Batam. It was our client that first found and invited them to invest here,” he said.

The planned investment was announced in October 2012. When first announced, the project was expected to start operation by 2014 and was also predicted to have an accumulated investment of up to Rp 70 trillion.

Defrizal said the reclamation of Janda Berhias Island had been completed, expanding an initial 22 hectares to 130 ha.

He said Sinomart and PT MCT had established PT West Point Terminal (WPT) for the development of the depot, with 95 percent of shares belonging to PT Sinomart and the remaining 5 percent held by PT MCT.

“But they cannot make a decision without discussing it with the minority shareholder, including about the contractor for the development of the depot, which had to be conducted through a tender,” Defrizal said.

He added that his client had handed over the case to international arbitration being handled by Singapore, the United Kingdom and Belgium.

“It will take a year for the international arbitration court to decide on the matter,” he said.