The oil products market in China is in the process of deregulation and
this will allow a larger role for foreign companies in the import and
distribution of refined products. Fortune Oil is one of the few foreign
companies with interests in products terminals in China.
Fortune Oil and Vitol jointly developed the
West Zhuhai Oil Products Terminal at the western entrance of the Pearl
River Delta. These facilities came on stream in 1998 and comprise
240,000 cubic metres storage and jetties for receiving and distributing
refined products. It is one of the few products terminals in south
China able to handle 80,000 dwt ocean-going tankers. A major stake was
sold to PetroChina which uses the terminal for supply of diesel to
south China and Fortune Oil acquired Vitol's interests to raise our
shareholding to 37 per cent.
The terminal is being expanded with the
construction of five new tanks with capacity of 220,000 cubic meters
which will bring our total capacity to 457,000 cubic meters.
Agreement has also been reached for the West Zhuhai Oil Products
Terminal to be part of PetroChina's "Strategic Oil Products Reserve
facilities". The new arrangement underlines the strategic
importance of the Company's unique storage facility in Southern
China. This strategic positioning will help to limit the
possibility of oil products supply disruption in Southern China.
Prior to the restructuring of the China oil
industry in the late 1990s, Fortune Oil was also a major participant in
the gasoline retail market and in oil trading. We continue to operate
two gasoline stations in Beijing but our trading activities are limited
to low-risk domestic and cross-border agency trading of non-regulated