PetroChina Boosts Storage Capacity – Analyst Blog
Source: http://www.zacks.com/stock/news/26313/PetroChina+Boosts+Storage+Capacity++-+Analyst+BlogPosted on Thursday, October 22nd, 2009 | In Investing Lessons, Stocks to Watch
In a bid to expand its storage capacity, PetroChina (PTR) has started building an oil storage project in Kunming, the capital city of southwestern Yunnan province. The project is expected to handle 1 million tons of freight annually. It will have a storage capacity of 85,000 cubic meters in the first phase and 150,000 cubic meters after the second phase.
Apart from the storage expansion project, PetroChina has also been actively investing in the refining space. In the last month, the company started operations at the $4 billion Dushanzi refining and chemical complex in the Xinjiang province. The complex consists of a refinery and an ethylene plant with capacities of 10 million tons and 1 million tons a year, respectively. The company estimates that the project may generate approximately $8.8 billion in annual revenue.
Despite the tentative global outlook, China’s fuel demand is expected to remain in growth mode, albeit at a slower rate. In fact, the current ongoing commodity rally is driven partly by a growing indication of the resumption of robust Chinese growth. The country’s strong economic growth over the last few years has significantly increased its demand for oil, natural gas and chemicals.
This creates opportunities for industry players who can meet the country’s fast-growing energy needs. Being one of the two Chinese integrated oil companies, PetroChina is well positioned to capitalize on these favorable trends. However, rising costs, special levies on domestic crude oil sales and a heavy exposure to mature oil region remain our concerns. We recommend a Neutral rating for the stock.
Read the full analyst report on “PTR”
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