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(Repeats story from Tuesday with no change to text)
* CEFC to start operating Yangpu storage next month
* ChemChina set to take about 9.5 mln bbl under 5-yr lease – source
* CEFC plans to add another 32 mln bbl of storage
By Chen Aizhu
BEIJING, May 24 (Reuters) – CEFC China Energy, a group with interests spanning oil, finance and travel, has agreed to lease out tanks at its new facility in the southern island province of Hainan to state-owned ChemChina to help build the country’s strategic reserves.
Privately-run CEFC is expected to unveil the 3.05-billion yuan ($465 million) Yangpu storage facility next month. The tanks at Yangpu are capable of holding 17.6 million barrels of oil in total, including the capacity to contain the equivalent of more than seven Very Large Crude Carriers (VLCCs) of crude.
“Under CEFC’s broad strategy to expand energy and economic cooperation, CEFC has agreed to lease its Yangpu oil tanks to ChemChina to store crude as part of China’s strategic petroleum reserves,” Shanghai-based CEFC told Reuters in an emailed statement on Tuesday.
CEFC didn’t specify the volume or duration of the lease.
A senior industry source with direct knowledge of the deal told Reuters that ChemChina was set to take about 9.5 million barrels under a five-year lease. The source, who was not authorised to speak to the media, declined to be identified.
ChemChina’s Beijing-based spokesman did not respond to requests for comment.
The facility at Yangpu special economic zone comprises 15 million barrels of storage for crude and 2.5 million barrels of space for refined products.
ChemChina, which started to import crude in 2013, is the latest state firm to join the country’s stockpiling programme. So far, the programme has been led largely by energy giants Sinopec and CNPC with a goal of building a supply cushion worth 90 days of net imports.
ChemChina, a chemicals major but a much smaller refiner compared with the two, operates about 500,000 barrels per day of refining capacity in China, mostly in eastern Shandong province.
China has been taking advantage of oil prices that have more than halved from their 2014 peak to build reserves. In the first four months of 2016, imports expanded nearly 12 percent, or 788,000 barrels per day on average, versus a year earlier.
China’s state reserves fall under two categories – strategic petroleum reserves for which the state builds tanks and pays the full cost of storage and oil, and commercial state reserves whereby the state leases tanks and shares the cost of buying oil with companies.
For the Yangpu storage, CEFC is planning second-phase development by adding another 32 million barrels of storage, as well as berths including one for VLCCs, CEFC said in its statement, without giving a timeline.
CEFC’s storage tanks are a stone’s throw away from an 8.2-million-barrel crude storage site owned by Vopak – the world’s largest independent tank terminal operator – and the State Development Investment Corporation (SDIC).
The CEFC and Vopak facilities are next to a tank farm owned by Sinopec Corp. The three have agreed to connect the depots with pipelines to optimise operations, industry sources have told Reuters.
The Sinopec facility is also linked to its 160,000 barrels-per-day Hainan refinery. ($1 = 6.5535 Chinese yuan renminbi) (Reporting by Chen Aizhu; Editing by Ryan Woo)
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