Hong Kong (Platts)--27Oct2005/508 am EDT/908 GMT

Hong Kong-listed Hans Energy has received an approval from the Chinese government to form a joint-venture company to develop an oil, gas and petrochemical terminal in Dongguan city, southern China's Pearl River Delta (PRD) estuary.

The oil trader and storage operator was informed by the municipal government's Dongguan Development and Reform Bureau Oct 21 that Beijing had given approval for the joint-venture establishment with Dongguan Humen Port Holdings, the company said in a statement filed to the Hong Kong Stock Exchange late Wednesday.

Hans Energy intends to take a 85% equity stake in the venture. DGHPH would control the remaining 15%. Hans Energy plans to develop a new oil, gas and petrochemicals storage facility, including a jetty terminal with the space to accommodate tankers with capacity up to 80,000 dwt, in the Shatian harbor area of Dongguan's Humen Port.

Details of the joint-venture proposal, including the committed investment amount and storage capacity at Dongguan, have not been finalized, Hans Energy said. The company is still studying Beijing's approval and has begun discussion with DGHPH on the implementation of the Dongguan project.

The company gave some insight into its oil and gas terminal business ambitious earlier this year. In its published 2004 annual report, Hans Energy said it was interested in a new PRD oil and petrochemicals storage project with a total storage capacity of about 700,000 cu m and 12 jetties with docking capacities ranging from 500 dwt to 100,000 dwt.

At the time, the company estimated investment in the entire PRD project to be Yuan 500- to Yuan 600-mil ($61.8- to $74.2-mil) and anticipated the new facility would become operational in 2006.

Hans Energy already owns and operates the Xiaohudao terminal in the PRD, Guangdong province. This terminal has 82 storage tanks with a total capacity of 325,750 cu m. Of these, 25 tanks with a combined 231,000 cu m capacity are for oil products storage, and 57 tanks with 94,750 cu m for petrochemicals.

The terminal has five jetties with capacities ranging from 500dwt to 30,000dwt. It is also one of the terminals designated by China's Shanghai Futures Exchange for physical delivery of its high-sulfur fuel oil futures contracts.