Shandong sees major expansion in pipeline and storage facilities

A group of local companies led by Qingdao Port International Co. Ltd. plans to build new pipeline and storage facilities in eastern Shandong province, China, due to increasing demand from independent refineries. The project is estimated to cost more than RMB 1.5 billion ( USD 229 million).

The companies plan to build two side-by-side 216-kilometre (134-mile) pipelines to link Qingdao’s Dongjiakou port area with Weifang, which is home to several independent refineries in China. The pipelines will have an annual capacity of 11 million tonnes. The pipelines will eventually be extended to the central and northern parts of Shandong and will have a capacity of 30 million tonnes per year.

An environmental assessment has yet to be conducted prior to making a final investment decision.

Shandong province is headquarters to 20 or so independent refineries in China. In the first four months of this year, these so-called “teapot” refineries imported 851,000 barrels per day of crude oil, which has caused congestion and delays at Qingdao Port, the single-largest crude oil port by volume in China.

The companies have also started building an 11.3 million-barrel crude oil storage site in Weifang, which is a transfer point and headquarters to several independent refineries, including the 100,000 barrel-per-day Sinochem Hunrun Petrochemical Corp.