Asia/Pacific News
Sinopec Building $850M Oil Storage Terminal in Indonesia
Chinese oil refiner China Petroleum & Chemical Corp., or Sinopec Corp. (Sinopec), has begun what will be Southeast Asia's largest oil storage terminal at the Batam Free Trade Zone in Indonesia, Reuters reports.
The 16-million-barrel, $850-million project is designed to help Sinopec's trading opportunities in Singapore, Asia's oil trading hub.
"Sinopec has a trading presence in Singapore and I imagine having a storage terminal in Batam, bordering Singapore, would be used to support their trading activity in the region," said Victor Shum, managing director at IHS Purvin and Gertz in Singapore.
"I think the terminal has very little to do with energy security for China. It is a commercial decision."
The project will be built on about 360 hectares of land in the Free Trade Zone over the next 18 to 24 months, and Sinopec unit Sinopec Kantons Holdings will hold a 95 percent stake in it.
Rival company PetroChina has a 35 percent stake in a 14-million-barrel terminal on Jurong Island in Singapore.
The Sinopec project was originally planned as a joint venture with Marquard & Bahls AG division OilTanking, but the deal fell through, industry sources told Reuters.
Sinopec is one of the largest integrated energy and chemical companies in China, the largest producer and supplier of refined oil products, and the second largest crude oil producer, according to its website.
Chemoil Energy Limited (Chemoil) said on Tuesday it is to sell its Jurong Island storage facility to Germany's Oiltanking GmbH (Oiltanking) for $285 million.
