The following press release was issued by BP China today.
BP and Guangzhou Development Industry Holding (GDIH) today signed a joint venture contract for the establishment of BP Guangzhou Development Oil Products Company Ltd to operate a world-class oil products terminal at Nansha in the Panyu district of China's Guangdong Province.
The signing took place at a ceremony attended by Mr. Huang Huahua, Governor of Guangdong Province; Mr. Zhang Guang Ning, Mayor of Guangzhou, and other senior government officials, senior company representatives and staff.
The Nansha terminal is a U.S.$86m joint venture between BP (40%) and GDIH (60%), with over 360,000 cubic metres of storage space for oil products. The company will develop a world-class terminal operation, focusing initially on oil and petrochemical storage and, subject to market opening and government approval, wholesaling.
The terminal enjoys an advantaged location with deep-water access at the heart of the Pearl River Delta, one of the fastest growing regions in China. The terminal can accommodate chemicals, gasoil, gasoline and fuel oil products, and will be operational in the first quarter of 2004.
Michael Bennetts, BP Regional Business Unit Leader for the Supply & Trading business, said: "We are very excited to have entered into this alliance with GDIH. Investment in the Nansha terminal supports our growth strategy by providing access to physical facilities for the importation and storage of oil products.”
Yang Dandi, Chairman of GDIH, said his company was delighted to be a partner with BP in the venture: "Nansha plays to the strengths of each party - BP's international experience in the oil business and GDIH's relationships in the local markets.”
Gary Dirks, BP Group Vice President, and Chief Executive Officer of BP China, said: "BP's investment in the Nansha terminal is an important milestone in our growth strategy for both Guangdong and China. The joint venture will operate in an increasingly deregulated market and will work to establish itself both as the rental facility and the supplier of choice to the local market. Achieving this will require working closely with our partner, local authorities, and most importantly our customers.”
Analysts forecast China to become increasingly tied to international oil markets as it seeks to satisfy growing energy demands. The Guangdong province, with 78 million inhabitants, accounts for almost 50% of the country's foreign exchange earnings and 12% of the country's GDP. Within Guangdong Province, the Pearl River Delta has a GDP/capita more than double the provincial average.