The company announced the plans after entering into a non-legally binding Letter of Intent (LOI) with Zhoushan Municipal Government.
Brightoil said it wanted to enlarge the scale of development from its originally planned 2.2 million cubic metre (m³) storage for oil products to as much as 5.5 million m³.
The company says Zhoushan City, on the southeast coast of China, has a strong geographic advantage for building a strategic storage and logistic hub for petroleum products.
It faces the southern side of the mouth of the Yangtze River, near the major Yangtze River Delta cities of Shanghai, Hangzhou and Ningbo.
Brightoil is the leading bunker supplier in Shenzhen Port and its surrounding areas, and expanded into the Shanghai and Ningbo bunker markets during 2009.
“Zhoushan not only is the hub of intersection of the coastal shipping line of the Northern and Southern China, it is also one of the four strategic oil reserve bases of the PRC and is traditionally an important oil transfer base,” said Dr. Sit Kwong Lam, Chairman & CEO of the Brightoil Group.
He said the Group anticipates “huge benefits” from expanding the capacity of the Zhoushan facility in view of “the inadequate supply of large scaled oil storage facilities in place in China.”
Dr. Sit added: “The project demonstrates the Group’s commitment in expanding the oil storage and terminal business and is beneficial to its marine bunkering business in the Yangtze River Delta region by streamlining the procurement process.”
The expected total investment for the Zhoushan terminal project is approximately RMB/CNY 7,100 million ($1,040 million), Brightoil said.
The sum includes the construction of oil storage facilities which will be 100% owned by the Brightoil group, and the construction of terminal facilities which will be owned by a joint venture with Zhoushan Port Group Limited.
In the statement, Brightoil said the group would also explore other opportunities including setting up a regional sales centre, ship repairing and maintenance centre as well as container ports investment in Zhoushan.