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Japanese government loans to go toward construction of two new terminals, adding natural gas storage and increased container capacity at main port

Photo by: Kay Kimsong

The Sihanoukville Autonomous Port entrance. A US$70 million facelift will add two new terminals at the country’s main port.

SIHANOUKVILLE Autonomous Port is planning a US$70 million upgrade to boost capacity for shipping containers and natural gas, the authority said Monday.

Lou Kim Chhun, chairman and CEO of the port, said the project involves two new terminals and would be financed by Japanese loans.

"We hope that the new ports will help increase the number of containers and increase gas stocks by millions of tonnes every year," he said.

"The two new ports will create jobs for over 200 people ... they will also help facilitate Chevron's oil extraction efforts," Lou Kim Chhun said.

Energy giant Chevron Corp is exploring off the Cambodian coast, but recent reports have cast doubt on its plans to extract oil and gas from the area known as the Khmer Basin. Chevron is partnered with Mitsui Japan.

Lou Kim Chhun added that he expects port traffic will increase five percent every year for three years, despite the economic crisis.

The expansion plan calls for construction to start in 2011 and finish by 2014. The first terminal will occupy a 260-metre stretch of waterfront land at a depth of 13.5 metres, he said.

The two new ports will create jobs for over 200 people and benefit the country.

The terminal will be capable of handling about 450,000 containers every year.

The second terminal will be equipped to store two million tonnes of natural gas on a 200-metre stretch with a water depth of 7.5 metres.

Cambodia has six official ports in operation. Three are run by private companies with natural gas storage capability, said Hei Bavy, general director of the Phnom Penh Port.

Thean Tithdara, logistics manager of Chevron Cambodia, welcomed the move by Sihanoukville Port, but would not comment on whether Chevron plans to use the facility.

"Chevron will only use ports that ensure safety, a suitable price and proper environmental-protection technology," he said.

"We already have safe ports for storing gas in Sihanoukville," he added.

Mong Reththy, chairman of Mong Reththy Group, which operates a seaport in Koh Kong province, said that the new investment was questionable in the current economic climate.

"I do not object to the development project, but I think they will have trouble getting back their money because of the economic crisis," he said. "At the moment, shipping volumes at my port are down 40 percent."

Kang Chandararot, president of the Cambodia Institute for Development Study, said the port would play a role in strengthening regional integration.

"I think that the new port is a good project because it creates new opportunities for sea transportation," Kang Chandararot said.

"We need to improve our services to compete with Vietnam and Thailand," he added.

Sin Chanthy, general secretary of the Cambodia Freight Forwarders Association, said that the upgrade could cut business costs.

"We are ready to use the services of the new ports. It will improve competitiveness," he said.