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US oil major Chevron has announced that it will double the capacity of its storage capacity in Las Minas, Panama, to 4 million barrels in order to meet growing demand in the region.

The Las Minas facility, which is located near the port city of Colón, is used to store product for the supply of bunker fuel and lubricants to ships transitting the Panama Canal and calling at ports nearby. It also includes a refinery, which is reported to have a refining capacity of approximately 60,000 barrels per day.

Panama has the highest oil terminal costs in the world and inadequate storage capacity has been a long-term issue in Panama. The limited capacity in the country has also lead to bunker fuel being sometimes moved through the Canal to meet temporary shortages at Balboa or Cristobal.

Chevron is currently the second largest bunker supplier in Panama with a market share of over 20 percent. US firm Chemoil Energy Ltd is the market leader, reportedly taking approximately 40 percent of bunker sales in the country. Other leading players in the Panama market include CEPSA Panama S.A. and ExxonMobil Marine Fuels Ltd.

The increase in storage capacity will evidently enable the company to compete with other suppliers for a larger share of the Panama bunker market.

Chevron said in a statement that it plans to double the storage capaciy of the Las Minas facility in the short term, but may potentially raise it further in the future.