China to invest in oil storage terminal in S. Korea
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Xinhua, October 9, 2011
Singapore-listed jet fuel supplier and trader China Aviation Oil (Singapore) Corporation (CAO) has agreed to invest about 34 billion won (32 million U.S. dollars) for a 26 percent equity stake in an oil storage firm in Yeosu, South Korea, the company announced on Saturday.
The announcement came two days after a similar announcement on an investment of 10 million dollars by the jet fuel trader in an oil storage terminal in Johor, Malaysia for the exclusive use of the company.
The Malaysia project was the first investment made by CAO in an enterprise outside China since its restructuring in 2004 and marks a milestone in its effort to build its network of assets in jet fuel trading, said Meng Fanqiu, chief executive officer of the company.
CAO will be the second largest shareholder in Oilhub Korea Yeosu Co., Ltd (OKYC), which is building the Northeast Asia Hub Terminal in Yeosu, a storage facility with a capacity of 8.18 million barrels, of which 4.22 million barrels will be used for oil products and the rest for crude oil.
Korea National Oil Corporation will be the largest shareholder with a stake of 29 percent in OKYC. Other shareholders include SK Energy and GS Caltex Corporation.
The terminal under construction now is only 1.88 days by sea from Tianjin and 1.21 days from Shanghai, respectively. It is also able to support trading activities to the west coast of the United States and Southeast Asia, CAO said.
"CAO's investment in OKYC is in line with its oil storage investment strategy and highly synergetic to its jet fuel trading business," Meng said, citing the location of the terminal in South Korea, one of the important source of fuel supply for the company.
Construction of the South Korean terminal has started in February this year and is expected to be completed by the end of 2012. CAO will be leading tankages there for storage of middle distillates on a long-term basis.
