September 7, 2016 [Reuters] - A new crude storage facility partly owned by Mercuria has opened in eastern China, industry sources said, the global energy trader's second operation aimed at feeding soaring demand for tank space in the world's top oil market.
With a capacity of 1.2 million cubic metres, or 7.5 million-barrels, the facility was built at Dongjiakou port, part of Qingdao port in eastern Shandong province, the country’s largest receiving point for imported crude oil, four sources familiar with the project said. It opened last month.
At 7.5 million barrels, the facility can hold the equivalent of one day’s worth of China’s current crude imports.
Mercuria has also invested in a similar-sized tank farm used mostly for fuel oil in Huangdao, also part of the Qingdao port, according to sources with direct knowledge of the matter.
Mercuria built the Dongjiakou facility in partnership with two local entities, Qingdao Port International and a local fuel dealer, Qingdao Yijia Haiye Trading Co Ltd.
Officials at Qingdao Port and Qingdao Yijia confirmed the facility partnership with Mercuria. Qingdao Port holds 65 percent of the facility, but it was not immediately clear how much Mercuria owns of the remaining 35 percent.
A spokesman for Mercuria declined to comment on either project.
Demand for storage and receiving terminals has risen since late last year when China for the first time granted crude oil import permits to about 16 independent refineries, most of which are located in Shandong.
Robust imports by these independent firms stretched port capacity and caused severe tanker jams earlier this year.
Growing storage capacity will also help Chinese market participants become more nimble on the global market as they seek to trade the arbitrage between the local and international prices.
