Petrochemical and fuel oil trader CEFC International has reportedly tied up with a subsidiary of Rizhao Port Group (RPG) to build and operate oil storage in Rizhao port, which is located north of Shanghai.
The joint venture between CEFC’s wholly owned subsidiary, Hong Kong CEFC Petrochemical and Energy Pte Ltd, and Rizhao Port Oil Terminal will have an initial registered capital of RMB350 million, with CEFC Hong Kong taking a 49 percent stake for RMB171.5 million in cash.
Rizhao Port Oil Terminal will satisfy the consideration for its 51 percent stake by transferring to the JV company the land on which the facilities will be constructed, and contribute the balance amount in cash if the value of the land is less than RMB178.5 million.
The project will cost some RMB700 million, including land costs and construction and development of the storage terminal. The remaining RMB350 million of the project cost will be funded by bank borrowings.