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Chinese bunker supplier Brightoil Petroleum is planning to build an oil storage facility north of the country.

Hong Kong-listed Brightoil has said that it plans to invest US$887 million to build an oil storage facility in the northern port area of Changxing Island in Dalian, Liaoning province.

When completed the new facility is expected to have a capacity of around 8 million cubic meters and will be used to store fuel oil, diesel fuel, aviation fuel, chemical products and crude oil.

Brightoil is also understood to be planning to build a 192.6-kilometer pipeline to link the storage facility with the national pipeline.

The company has also said it plans to set up a 60-40 joint venture with Dalian City Municipal Government to build a wharf in the city. The wharf will comprise of 13-15 berths and will require an investement of around US$160 million.

News of Brightoil's plans to store fuel oil in Dalian will no doubt alert its main rival in the marine fuels market China Marine Bunker Supply Co. (Chimbusco).

Brightoil recently began supplying marine fuel at the eastern ports of Shanghai, Ningbo and Zhoushan, prompting Chimbusco to cancel its policy of publising posted prices for ports also covered by Brightoil.

Brightoil also supplies marine fuel at the southern ports of Shenzhen, Yantian, Shekou and Chiwan in Guangdong province. It is currently the only bunker fuel supplier at Yantian where it has a 400,000 cu m storage facility.

Shenzhen-based Brightoil is reported to have sold 824,000 tonnes of marine fuel during the last six months of 2008. The company has also said that it intends to expand its current network to cover most of China's ports by the end of this year and to begin supplying in Rotterdam and the U.S West Coast in the near future.

Elsewhere in Asia, the company started servicing ships in Hong Kong in late April and in May Brightoil received approval from the Maritime and Port Authority of Singapore (MPA) to begin operating as an accredited supplier bunker fuel at the world's leading bunker port, subject to the company meeting specific conditions, which included the use of double-hulled bunker tankers.

Brightoil is reported to be planning to start its operations in Singapore during the third or fourth quarter of 2009.