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Energy group CEFC to lease crude storage to ChemChina for strategic reserves
May 24, 2016 / 9:21 AM / a year ago

Energy group CEFC to lease crude storage to ChemChina for strategic reserves

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-run 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 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 said 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. ($1 = 6.5535 Chinese yuan renminbi) (Reporting by Chen Aizhu; Editing by Ryan Woo)

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