Longwei Petroleum Announces Plans for New 70,000 Metric Ton Capacity Oil Depot in Gujiao
Jun 24, 2009 – Longwei Petroleum Investment Holding Ltd. (OTC Bulletin Board: LPIH), a leading China-based energy trading company operating in Shanxi Province, China, announced its plans to complete construction on a 70,000 metric ton capacity oil storage facility in the city of Gujiao, a major industrial center located in Shanxi Province. The new facility will more than double the company’s storage capacity to 120,000 metric tons and will potentially increase revenue by 100% within 24 months following completion. Longwei has already allocated approximately $23.8 million toward construction of the facility. The company hopes to complete the facility in 2009.
Longwei’s Gujiao project has been approved by Shanxi Province Economic and Trade Committee and meets the regional development planning and national industrial policy requirements. To date, Longwei has completed the construction of the 70,000 metric ton oil tank area, including 11 new oil storage tanks. Remaining construction includes work on the private railway system, handling system and ancillary facilities. T he new facility will allow Longwei to service customers quickly and efficiently in Gujiao and surrounding areas, expanding their market in Shanxi Province.
“The new facility is strategically located in Gujiao’s fast-growing industrial zone, providing a prime marketplace for Longwei’s oil,” said Cai Yongjun, Chairman and Chief Executive Officer of Longwei. “The coking plants and electric power plants of this region will certainly be an abundant market for us, and we are encouraged by the interest already being expressed for our products. We believe the industrial growth in Gujiao will make this an important oil base and create a good economic foundation for the future profitability of Longwei and the Gujiao oil depot,” added Mr. Cai.
At present, mainland China ranks third in the world for finished oil products consumption. Experts predict that in 2010, China’s finished oil products demand will be 185 million tons to 189 million tons and will grow 6% each year for the next 10 years.
Shanxi Province is the largest energy-producing region and the third largest consumer of petroleum products in China. In 2008, the province’s road freight volume was the fifth highest in China. Currently, there are 4,692 gas stations servicing approximately four million cars in the province, providing a strong market for finished oil products. Gujiao, located west of Taiyuan City, is the energy center of coal, coke and electricity for Shanxi Province and for China. The power plants in Shanxi provide Beijing — China’s second largest city and capital — with 30% of its electricity.
