The company has been in negotiations with the Maritime Affairs and Fisheries Ministry to build oil storage facility on a 20ha section of the island.
Indonesia Coordinating Maritime Affairs Minister Indroyono Susilo was quoted by Jakarta Post as saying that the approval is in line with the government’s effort to cooperate with the private sector to protect Nipah from erosion.
Indroyono said: "The erosion could see Nipah nearly disappear. If it vanishes, we may lose some of our territorial waters."
The approval will allow Surya Mina to finalize the engineering and design aspects of the facility, which will have 1.5 million cubic meters of oil storage capacity. The plant will store oil stocks from the Middle East.
Surya Mina Asinusa will develop the project on build-offer-transfer (BOT) basis with a 30-year concession period.
