China's largest offshore producer starts construction on $197m facility.
China National Offshore Oil Corp (CNOOC) has begun construction on of the first phase of a berth and oil products storage hub in the port city of Yantai, Shandong province. The joint venture, between a subsidiary of the group and the Yantai Port Group, comes with a price tag of 1.24 billion yuan ($197 million) for the 248,000 square metre facility, which will have a 1.2 million cubic metre capacity upon completion.
The first phase will include 15 floating storage tanks, nine of which will store 100,000 cubics metres, with the remaining six containing only 50,000 cubic metres each. CNOOC will use the facilities mainly to store imported oil products as it looks to increase its refining market share in Shandong.
CNOOC's expansion of local capacity highlights an increased need for oil and petrochemical storage by China's oil majors. The Yantai facility mirrors Sinopec's recent announcement of a new Indonesian storage facility and the purchase of European storage interests.