Dalian Port to form oil terminal venture with PetroChina

Dalian Port (PDA) Co said it agreed to form a Yuan250m ($36.5m) oil terminal joint venture with PetroChina as it unveiled a 70% surge in first-half net profit.

The Hong Kong-listed port operator, which runs oil, container and ro-ro terminals in north China’s Dalian, said the oil terminal will have a designed capacity of 300,000 metric tons of crude oil.

The terminal, to be located at Xingang in Dalian, will be able to accommodate 440,000 dwt vessels with its -28m draught.

PetroChina is the largest-listed oil company by capacity in the country and one of the biggest customers at Dalian Port.

The partners will form a 50:50 joint venture, named Dalian Port PetroChina International Terminal Co, for the project around the end of next month. The venture hasn’t received government approval yet.

Dalian Port posted net profit of Yuan534m in the first half of this year. Its revenue rose 7.3% to Yuan746m in the period.

The strong profit growth was due to the one-off income from the sale of oil tanks with capacity of 450,000 cu m to PetroChina, the sale of shares in its phase II terminals to its three partners Maersk, Cosco and PSA, as well as the sale of two containerships in the period.

The oil business contributed to 44% of the port’s revenue in the first half of this year. The sector chalked up a 12% increase in profit despite a 1.2% drop in oil products handled to 17m tones.

Ganeral manager Jiang Luning said the drop was mainly due to a fall in crude oil transshipment and liquefied chemicals volumes.

Mr Jiang said crude oil transshipment was weaker because Dalian Port of the sale of oil tanks to PetroChina, which left the firm with less storage capacity.

However, with 12 new tanks starting operations before the end of this year, the company expects to improve its performance in the oil handling sector in the second half of the year. The new tanks will bring its storage capacity up from the present 2.9m cu m to 4.1m cu m.

The port is also planning to raise its handling charges for oil in the second half of this year.

Dalian Port’s next largest business is container handling, which accounted for 38% of its revenue in the first half. Container volume came to 2.6m teu in the first six months, up 34.7% from the same period last year. It raised its container handling charges by 7% in the period.

Mr Jiang said volume on all trades, except the transpacific, recorded healthy growth in the period.