Brightoil Zhoushan Oil Storage Project Begins

Brightoil Petroleum (Holdings) Limited [HKG:0933] (Brightoil) has hired a company to build oil storage facilities with a capacity of 1.94 million cubic meters on Waidiao Island in the Chinese city of Zhoushan for a price of RMB1.32 billion ($215 million), the company said in a regulatory filing.

The project, being built by China Petroleum Pipeline Bureau, will provide storage for fuel oil, petroleum, diesel fuel, jet fuel, and chemical products, as well as electricity and utility supplies, sewage treatment, heat, roads, management facilities, and other associated facilities.

The contract calls for the work to begin within 15 days and to be completed within 16 months after is starts.

 Brightoil said the facility, within Zhoushan's Cengang Town in China's Zhejiang Province, will "enable the Group to expand into the storage and related logistics business in relation to petroleum products in the PRC [People's Republic of China]."

The company has said the storage facility will allow it to take direct deliveries from very large crude carriers (VLCCs), bringing its costs into line with those in Singapore and helping it to compete in the industry.