* Dongming teams up with private firm CEFC, Rizhao port
* Project includes three crude berths and a tank farm
* Logistics bottleneck with top oil port Qingdao congested
By Chen Aizhu
BEIJING, March 3 Dongming Petrochemical, China's
largest independent or 'teapot' refiner, has signed a deal with
privately run CEFC China Energy and a local port authority to
build a crude oil terminal in Shandong province, seeking to ease
a logistics bottleneck gripping the country's teapot oil sector.
The 3.9 billion yuan ($566 million) project with
conglomerate CEFC China Energy and Rizhao port authorities comes
as China's teapots refiners emerge as a catalyst in the global
oil market, ramping up Russian and U.S. imports in frenzied
buying that has led to tanker queues and scarce storage space.
Executives at Dongming, formally known as Shandong Dongming
Petrochemical Group, and private firm CEFC said on Friday that
publicly owned Rizhao Port Authorities will take 51 percent of
the project, CEFC 25 percent and Dongming 24 percent. Plans
include a 300,000 deadweight tonnage (DWY) crude terminal, two
150,000-DWT crude berths and a 9.8 million barrel storage farm.
"With Qingdao port nearly saturated, Rizhao stands out with
its ideal location, with easy access to teapots to the north and
close also to Lianyungang, one of China's planned future
petrochemical hubs to the south," a CEFC executive told Reuters,
declining to be named as he was not authorised to speak to
media. CEFC has interests spanning finance and travel as well as
A CEFC press official confirmed the details of the deal.
Qingdao port is the country's largest oil port by volume,
accounting for 27 percent of China's total crude oil imports
last year, with crude shipments into the port up nearly 50
percent over 2015, according to Chinese customs data.
The Rizhao terminal project will be one of a series in
Shandong, as other firms have also planned to add new pipeline
and storage facilities in the area to provide much-needed
Dongming's vice president Zhang Liucheng told Reuters by
telephone that construction of the project is slated to start by
mid-year. The teapot refiner already operates a crude oil
pipeline connecting Rizhao and its 240,000 barrels per day (bpd)
refinery in Heze city of Shandong.
In Lianyungang, a port city in neighboring Jiangsu province,
Dongming runs another smaller plant with 60,000 bpd
capacity, according to the company website.
There are two existing crude oil berths in Rizhao able to
anchor supertankers, according to the CEFC executive. The
project marks the firm's second major investment in storage and
terminal facilities in China, after its 17.6 million-barrel tank
farm in the country's southernmost Hainan province.
($1 = 6.8986 Chinese yuan)
(Reporting by Chen Aizhu; Editing by Kenneth Maxwell)