Kooragang Island could be the location of a new one billion litre diesel storage facility under plans to expand the Port of Newcastle's fuel storage capacity.
Park Fuels, which built a state-of-the-art terminal at Koorgang five years ago currently stores 54 million litres of diesel on the island.
But it hopes to increase that to a billion litres by building a new storage tanks adjacent to the Greenleaf Road facility.
The quantity represents the majority of the 1.5 billion litres that the federal government wants to add to the nation's onshore diesel storage reserves.
Park fuels chief executive Brett Fletcher said the expansion could be completed by 2024 if the project was approved early next year.
"The land is sitting there next to our terminal, which was built to scale-up," he said.
Twelve people are currently employed on site. This would increase to 32 if the expansion went ahead.
About 200 construction jobs would be created during the construction phase.
"When you look at the subcontracting jobs and the increased throughput in port, it will have a very large flow-on effect in the regional economy," Mr Fletcher said.
The Newcastle Herald reported on Tuesday that the Port of Newcastle had earmarked three sites within the port as future fuel storages.
The sites at Walsh Point, the Kooragang Precinct and the Mayfield Precinct are contained in the port's response to a federal government Request for Information about opportunities to increase Australia's domestic fuel storage capacity
Liberal senator Hollie Hughes, who toured the sites on Tuesday said she was convinced Newcastle was an ideal location for increased fuel storage.
"I think Newcastle is absolutely the best spot," Senator Hughes said.
"It is critical for not only its location but also the fact that it already has such great infrastructure, it already has a port with deep access, you have the roads, the rail, all of those access points are already there and ability to expand upon that to secure the economic viability of the Hunter Region as an absolute powerhouse of the nation is critical."
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