Indonesia to Involve Private Sector in Building Fuel Storage Tanks

Indonesia’s Ministry of Energy and Mineral Resources (ESDM) plans to involve the private sector in developing oil storage facilities in Sumatra to boost the nation’s energy reserve capacity to three months.

Laode Sulaiman, Director General of Oil and Gas at the ESDM Ministry, stated that the development of these storage facilities will not be limited to PT Pertamina (Persero) but will also present opportunities for other business entities to participate.

According to Laode, the construction locations for the oil storage tanks have been designated in the Sumatra region. “The location has already been indicated to be in Sumatra. Regarding the construction process, it will certainly not be limited to Pertamina but can also involve other business actors,” said Laode, speaking at the Balongan Refinery Complex on Thursday, 12 March 2025.

Laode further explained that private sector involvement in developing energy facilities is not a new concept. Currently, several existing oil storage facilities already involve parties outside Pertamina.

“It has been stated that since our current capacity only extends to 23 days, we will build additional capacity up to 90 days, as was previously announced by the Minister. That is the plan,” he said.

Earlier, Energy and Mineral Resources Minister Bahlil Lahadalia noted that Indonesia’s current oil storage capacity remains limited. The country’s storage capacity can currently support only approximately 20 to 25 days of national demand.

Bahlil considered the development of storage facilities a priority so the government would have sufficient space to hold large quantities of oil. “We must first build storage capacity for a minimum of three months. If we import large quantities, where would we store it? These are simply the facts, not anyone’s fault,” said Bahlil at a press conference at the ESDM Ministry.

The feasibility study for the project is currently underway and is targeted for implementation during 2025. However, detailed location specifications for the storage tank development have not yet been disclosed.

“The feasibility study is ongoing, with the target to begin implementation this year. Regarding the location in Sumatra, I will not provide specific details,” he said.