(Yicai Global) Aug. 29 -- Qingdao Port International Co. [HK:6198] and PetroChina Fuel Oil Co. plan to spend USD45 million (CNY300 million) to set up a joint venture to add 600,000 cubic meters of crude oil storage to Qingdao's Dongjiakou Port Area.

Qingdao Port International has signed a letter of intent to establish a JV with PetroChina Fuel Oil, a wholly-owned subsidiary of PetroChina Co., in Beijing, Qingdao Port (Group) Co. told The Paper yesterday.

The joint venture will have a registered capital of CNY300 million, with Qingdao Port International contributing CNY147 million or 49 percent of the total and PetroChina Fuel Oil contributing CNY153 million or 51 percent.

The JV will store, load, unload and transfer crude oil, fuel oil and wax oil products, per the letter of intent.

Qingdao Port is the largest oil transport, transfer and storage base in coastal China and ranks first in the country for amount of crude oil loaded and unloaded. A top-notch port with a capacity of 300,000 tons of crude oil and oil storage tanks with a capacity of nearly 3 million cubic meters have been built at Dongjiakou Port Area, which can handle 25 million tons of crude a year.

Dongjiakou Port Area will have crude oil storage tanks with a combined capacity of 3.46 million cubic meters after the project is completed. This capacity, along with Qingdao Port's Dongwei oil pipeline project, will help Dongjiakou Port Area serve petrochemical companies in Shandong province, improve its ability to handle crude oil and promote the development of the province's petrochemical industry. The first phase of Qingdao Port's Dongwei oil pipeline project started operations this month.