On August 16, Shandong Huaxin Industry and Trade Group launched an on-site observation meeting on the construction of crude oil storage depot under Rizhao Dekun Energy Co., Ltd. Dekun Energy's crude oil storage depot construction project is nearing completion and is expected to be officially put into operation in September. After the project is officially put into operation, adding to the existing storage capacity of Rizhao Hankun Energy Co., Ltd., which is also a subsidiary of Huaxin Industry and Trade Group, a total crude oil storage capacity of 4.2 million cubic meters will exceed that of Zhonggu Storage and Transportation (Zhoushan) Co., Ltd. The largest private crude oil storage company in China.

Figure 1 Rizhao Dekun Energy Crude Oil Tank Farm has been completed

Figure 2 Rizhao Dekun Energy Crude Oil Tank Area

After the completion of Rizhao Dekun Energy Co., Ltd., it will have a total storage capacity of 2 million cubic meters, which will complement the 2.2 million Hankun Energy Co., Ltd. separated by a wall. After the completion of Dekun Energy, in cooperation with Hankun Energy, it will further enhance the crude oil circulation capacity of independent refineries in Shandong Province. In terms of bonded crude oil storage capacity, Dekun Energy’s newly built 2 million li are all bonded warehouses, while Hankun Energy’s bonded crude oil storage capacity is also as high as 2.18 million li.

As we all know, Shandong is the region with the largest number of independent refineries and the densest distribution in China. According to data from Longzhong Information, as of June 2020, domestic independent refineries have a primary processing capacity of 352 million tons of crude oil, of which Shandong independent refineries have reached 184 million tons/year, accounting for 52.3%. Since the country first opened the import of crude oil permissions to private refineries in 2015, demand for imported crude oil from independent refineries has remained strong in recent years.

After Dekun Energy is completed, it can provide bonded warehousing and transit services for domestic and foreign oil traders, surrounding independent refineries and crude oil futures markets. The crude oil pipeline currently under construction at Rizhao Port will be extended to Jingbo Petrochemical. Soon Dekun Energy will also be able to serve refineries in Zibo, Dongying and Binzhou through the pipeline, with a considerable scope of influence. In addition, in conjunction with Rizhao Lanshan, a major crude oil port and long-distance crude oil pipeline, Rizhao will also become an important crude oil distribution and transfer base in northern Shandong.

Table 1 List of main crude oil terminals in Lanshan Port of Rizhao

Table 2 List of Rizhao Crude Oil Pipelines in Shandong Province

When the fourth berth for VLCC is completed, Rizhao Lanshan Port will become the port area with the most large V berths in Shandong. It is estimated that by 2021, the overall annual crude oil passing capacity of Rizhao Lanshan Port will reach more than 100 million tons. At the same time, the construction of a number of oil pipelines will make the transportation of crude oil more convenient in the future, and the service capacity of the Lubei and Luzhong refineries will be further improved.

Hankun/Dekun Energy is built on the Rizhao Lanshan Port, with low crude oil storage cost, convenient transshipment, smooth re-export trade and domestic sales. After Dekun Energy is officially put into production, this country's largest private crude oil storage is bound to play a more important and active role to help independent domestic refineries continue their voyage.
 

Article source: Longzhong Information