The Indonesian government wants state energy company Pertamina to move its Plumpang fuel terminal, one of the country's oldest and largest, after a fire broke out at the facility in Jakarta, killing 16 residents nearby, according to Reuters.
However costs and politics could get in the way of relocating the terminal, which has storage capacity of 325 million litres (86 million gallons) and supplies about one-fifth of the country's daily fuel.
On March 3, around 8 p.m., a fire broke out at Plumpang, located in a densely populated area in North Jakarta. Around 30 minutes before the fire, people nearby smelled fuel, causing some to vomit, local residents told KompasTV. Pertamina said it had detected a pipe leak before the fire broke out. Its spokesperson Fadjar Djoko Santoso said the fire affected only a fuel pipe at the terminal while the storage tanks remained safe and activities at Plumpang had resumed.
The incident was particularly deadly as there are homes just outside the fuel terminal's outer wall, while some other homes are only separated from the wall by a narrow street. Plumpang had another major fire in 2009. Other incidents at Pertamina's refineries include a fire at its Balongan refinery in March 2021 and fires in the storage area at its Cilacap refinery in June and November in 2021. Local media reported that a fire in Pertamina's Balikpapan refinery last year injured five workers and killed one.
Indonesia's State-Owned Enterprises Minister Erick Thohir, who oversees Pertamina, said the government proposed to move Plumpang to a new location in another part of North Jakarta which is being prepared by Indonesia Port Corporation (IPC). IPC's chief executive Arif Suhartono said the company has two plots of land near its Tanjung Priok container terminal, each 32 hectares (79 acres), designed for oil and gas facilities, which could be used by Pertamina. Reclamation is ongoing and the land would be ready in 2024, Arif said, adding that Pertamina had previously approached the port company for a potential relocation.
Pertamina is reviewing the government's proposal for long-term planning, spokeperson Fadjar said, adding the company is also reviewing relocation costs. Yusri Usman, executive director of Center of Energy and Resources Indonesia, estimated a new terminal could cost around $350 million and take at least four years to build. Jakarta would have to provide financial support to Pertamina for any upgrades by cutting its dividend payout to the government, said Komaidi Notonegoro, executive director at think tank ReforMiner Institute.
Building a new facility would be simpler than relocating dozens of families living in the nearby area, said Fahmy Radhi, an energy analyst from Gadjah Mada University. However Luhut Pandjaitan, Coordinating Minister of Maritime and Investment Affairs, who oversees energy, said the people encroaching on the buffer area around Plumpang should be moved. He told reporters a buffer zone was set aside for the terminal when it was first built and blamed the loss of that buffer on authorities who allowed homes to be built there.
Authorities are investigating the cause of the fire, while the head of parliament's energy committee, Sugeng Suparwoto, called for "an urgent total audit" of all Pertamina's assets, including refineries. Several refineries were built in the 1970s and have been running at full capacity, making them vulnerable to breakdowns, he said. Pertamina would need to assess climate risks due to changes in weather patterns with more thunderstorms occurring, he added. The committee will summon Pertamina's executives as soon as parliament returns from recess next week. Under a 2015 plan, the company aims to upgrade four of its biggest refineries and build two new ones, which would nearly double its processing capacity to more than 1.5 million barrels per day. However new projects have been delayed while Pertamina redesigns plans to meet demand for cleaner energy.