Giant oil firm Caltex Australia Ltd (ASX: CTX) announced on Monday that it is tapping Transfield Services Ltd (ASX: TSE) for expansion works on the company's fuel depot at Port Hedland in Western Australia.

The oil company said that Transfield would commence work in September this year, in which the contractor is set to construct two 20 million litre diesel tanks and a road tankers loading facility for targeted completion by late 2011, the scheduled commencement operation of the terminal.

Caltex national manager for distribution Mike Raleigh said that the project is aimed at providing boosted capacity that would service the mining and offshore oil and gas operations in the north-west part of Western Australia.

Mr Raleigh added that Caltex currently maintains a relatively small terminal in the area that serves the fuel needs of the region's industrial operations.

He said, however, that the with the potential growing demands from existing and future customers, more storage capacity would be required, which prompted the company to construct the terminal, further ensuring that the fuel supply would be stable.

Mr Raleigh stressed that once completed and operational, the new terminal would "ensure secure, reliable and more cost-efficient supply to our customers for many years to come."