According to the company's website, SDIC Communications Co., and Netherlands-based Royal Vopak will jointly invest US$1.02 bln in a commercial oil reserve project to be located in Yangpu Economic Development Zone in Hainan. Royal Vopak, the world's largest independent tank terminal operator, runs storage facilities, mostly of chemicals, in the eastern coastal provinces of Jiangsu, Fujian and Zhejiang and Shandong as well as Tianjin municipality. As per the government official of Hainan province, the much longed for commercial oil reserve base will create a firm ground for Yangpu to become an industrial base for oil, gas and petrochemicals. The project shall accelerate the downstream businesses such as oil refineries, which matches Yangpu's plan to develop a large-scale petrochemical complex in the area. The commercial storage facility will ensure a stable supply of crude for further processing.
The project envisages the construction of a 500 mln sq. m. area commercial oil storage base and public oil terminal containing two 300000 ton berths, two 100000 ton berths and two 50000 ton berths for crude and oil products. According to a senior authority of China Energy Research Society, China is looking for investment options not only in crude oil reserves but also commercial storage units to pull in on the demand and supply at a time where international oil price is rising.
The oil refining project by Yangpu invested by Sinopec, China's largest refiner produces 8 mln tpa of oil amounting to sales revenue of 333 bln Yuan. Also, a co-investment by Sinopec-Hainan Oil Refinery & Chemical Co and Shanghai Garson Group in a styrene plant, is in operation which produces an annual output of 80000 tons amounting to sales revenue of 600 mln Yuan. In April, Hainan province received approval from the National Development and Reform Commission to build an ethylene plant in Yangpu. The project built by Sinopec is expected to produce 1 million tons of ethylene every year once operational in 2013.