The Jakarta Post
State-owned energy holding company Pertamina has inked a heads of agreement (HoA) with US-based commodity firm Freepoint Commodities Pte. Ltd to transform its fuel terminal (TBBM) on Sambu Island, Riau Islands, into a trading hub.
Pertamina logistics, supply chain and infrastructure director Gandhi Sriwododo said after the signing ceremony on Friday that the TBBM Sambu Island, located between Batam and Singapore, could become a trading hub in the Malacca Strait.
“There’s big potential in the market, but we’ve yet to tap into it. Only Singapore and Malaysia have banked on it. Hence, we hope the deal with Freepoint will help TBBM Sambu Island enter international trading,” he said.
Pertamina has yet to reveal details about the next official agreement or when it might be inked, saying only that the two parties were discussing a follow-up to the HoA.
Freepoint Commodities founder and chairman David Messer agreed that the TBBM Sambu Island had a strategic location to become an important fuel storage facility in the region.
“This is our first project in Indonesia, and we welcome the opportunity. Sambu is a strategic terminal and could become a significant storage and depot in the region due to its closeness to the Singaporean market,” he said.
Freepoint Commodities vice chairman Sheldon Pang said in a press statement that the agreement with Pertamina was part of the firm’s support for repairing Indonesia’s oil infrastructures and developing low-sulphur bunkering in the country.
Pertamina spokeswoman Fajriyah Usman explained that, in the deal, Pertamina would supply products that would be stored and blended at TBBM Sambu, whilst Freepoint would help in the operational process.
Currently, TBBM Sambu Island, which exists since 1897, when the country was still a Dutch colony, has a fuel storage capacity of 320,000 kiloliters (kl) with its 17 tanks. (bbn)