A Shell (RDSa.L) joint venture in China has begun building an oil product storage facility of capacity 200,000 cubic meters (1.26 million barrels) in the northern port city of Tianjin, official news agency Xinhua said on Thursday.

The facility involves an investment of 550 million yuan ($86.4 million). The first phase of the Nangang storage, with capacity of 55,000 cubic meters, will be completed in 2013, while the second phase will kick off in 2014 and be completed in 2015, Xinhua said.

The storage facility is expected to handle 3 million metric tons (3.3 million tons) of oil products a year and generate annual sales revenue of 24 billion yuan, the agency said.

Shell North China Oil Group, a joint venture between Shell China and Tianjin State Farms Agribusiness Group, operated about 210 service stations in Tianjin and neighboring provinces by the end of 2011, domestic media said.

Tianjin, near Beijing, is home to a Sinopec subsidiary refinery of 300,000 barrels per day. Other storage facilities there include a 1.0 million-cubic-meter commercial crude oil storage operated by state oil giant CNPC and a 3.2 million cubic meter commercial crude storage being built by Sinopec (0386.HK). ($1 = 6.369 Chinese Yuan)