March 13, 2012 [Reuters] - China's Sinochem Group has signed a tentative pact with the local government in southeastern Fujian province to build a $948-million oil storage site with a capacity of 3.8 million cubic metres, or 27 million barrels, the state-run firm said.
The project in Zhangzhou, which also includes an oil port, will be used to service petrochemical firms in the Gulei Economic Development Zone, Sinochem said on its website (www.sinochem.com).
The project was estimated to cost 6 billion yuan ($948.39 million), the Fujian newspaper Hai Xia Dao Bao reported.
The storage would include tanks for crude oil, oil products and chemicals but most of it would be devoted to crude oil, according to a company official.
It was not immediately clear when the parties would seek central government approvals before construction. Big projects have to go through lengthy approval procedures in China.
A cluster of petrochemical projects, including a 100-billion yuan petrochemical complex by China Petroleum and Chemical Corp (Sinopec Corp) and a 38-billion-yuan ethylene cracker by PetroChina, have also been planned in the region, the newspaper reported.
The local government aimed to start a 13.7-billion-yuan paraxylene plant in June, it quoted a government official as saying.
Local government officials are often eager to attract investments from big state firms or foreign enterprises to raise economic output, which is one of the key ways to boost their chances of promotion in the government hierarchy. ($1=6.3265 Chinese yuan)
