Private Chinese refinery Shandong Hongrun Group plans to expand its 13 million m3 crude oil storage facilities in Weifang and Qingzhou, in Shandong Province, China, by 20% in 2021, according to Reuters.
An unnamed source told the newswire that the expansion will take the total capacity of the two tank farms to 15.8 million m3, the equivalent of 100 million bbl, the equivalent of nine days of Chinese oil imports. The Weifeng site currently has a capacity of 12.2 million m3, while the nearby Qingzhou site has a capacity of 800,000 m3. The expansion will help to meet growing demand from third parties.
‘Most of our storage targets third-party commercial use, as our site is kind of a transfer centre for more than 70 refineries in Shandong,’ the official said.
Reuters reports that three quarters of the tanks at the facilities are bonded warehouses, which store oil that has not been cleared by customs, and allows refiners and traders to store oil without government import quotas. The official told the newswire that Mercuria, Vitol and BP are amongst the company’s clients, along with the Shanghai International Energy Exchange, which uses 20 million bbl of capacity as delivery tanks for the Shanghai crude oil futures contract.