Private Petroleum Enterprise in South China to Invest $1 Billion for Storage Terminal

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Researched by Industrial Info Resources (Sugar Land, Texas)--Brightoil Petroleum Holdings Limited (Hong Kong) (HKG:0933), the listed flagship of Brightoil Petroleum Group (Shenzhen), recently signed an investment agreement for the Changxing Island oil-storage project with the Dalian Changxing Island Port Area Industry Administration Commission, part of the municipal government of the city of Dalian. The project involves construction of a large-scale oil-storage terminal.

According to the agreement, Brightoil Petroleum will invest $1.01 billion to establish and operate an 8 million-cubic-meter terminal, as well as associated port facilities and pipelines. These facilities will occupy 200 hectares in the Changxing Island Port Area Industry Zone. The storage terminal will be built in two phases, and the investments for Phase I and Phase II will be $570 million and $440 million, respectively. Construction of the project will last about four years, with each phase taking approximately two years. Upon completion, about 30% to 40% of the storage capacity of the project will be reserved for Brightoil's use, and the rest will be used to support the company's offshore oil supply business, according to Guanglin Xue, Chairman and CEO of Brightoil Petroleum.

As reported, the storage terminal will be wholly invested, owned and operated by Brightoil Petroleum, and the facility will be used for the storage of fuel, diesel, aviation fuel and crude oil. The associated port facilities will contain 13 to 15 berths, including a berth for boats up to 300,000 tons. The port facilities and related oil pipelines will be built and operated by a joint venture in which Brightoil Petroleum will hold a 60% share and the administration commission will hold a 40% share.

Brightoil Petroleum, with total assets of about $1.45 billion and annual sales income of more than $2.9 billion, is the largest private petroleum enterprise in southern China and one of the five duty-free offshore oil suppliers to receive approval in China.

In addition to the project in Dalian, Brightoil Petroleum is building an oil-storage facility with an initial capacity of 2.2 million cubic meters and 15 berths for cargos ranging from 1,000 to 300,000 tons. The project is under way at Waidiao Island, Zhoushan City, in eastern China's Zhejiang province. Brightoil Petroleum is also planning to establish its own large-scale tanker fleet.

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