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Oil major BP has begun work on the planned expansion of its Largs North fuel storage terminal in Adelaide, Australia.

Under the first phase of the $20 million project, BP will build a new 30 million litre storage tank that will allow larger volumes of diesel to be stored on site, thus providing greater operational flexibility and increased security of supply.

The terminal expansion project was announced in April 2011 and since then BP has been finalizing its plans, carrying out site clearance and undertaking ground works.

To mark the occasion, Tom Koutsantonis, Minister for Manufacturing, Innovation and Trade and Minister for Mineral Resources and Energy, officially launched the construction phase of the project.

In addition to the new storage capacity, BP has recently invested $4 million to upgrade the terminal's fire-fighting system and spent $2 million on installing a vapour recovery unit.

Over the next five years, BP plans to invest a further $20 million at the Largs North terminal. According to the oil major, the investment would improve reliability, reduce risk and further improve environmental performance.

Commenting on the expansion project, Paul Waterman [pictured], President BP Australasia, said: "Adding to our storage capacity in Adelaide will allow us to further optimise shipping operations from our Kwinana refinery in WA and capture the opportunities presented in South Australia."

"We also plan to continue to invest in our terminal infrastructure to reduce risk and ensure our operations are safe, reliable and able to meet the needs of our customers."

Image: Paul Waterman, President BP Australasia.