(EnergyAsia, October 17 2012, Wednesday) — Longwei Petroleum Investment Holding Ltd, a NYSE-listed company engaged in the storage and distribution of oil products in China, said it has started operations at its recently acquired Huajie fuel storage depot in northern Shanxi province.
The company began delivering fuel to customers on October 11 after receiving its first products cargo at the new terminal in Xingyuan town located in a growing industrial and mining region some 200 km north of Taiyuan.
Longwei completed the RMB700 million purchase of the 100,000-metric-ton fuel storage depot and other assets of Huajie Petroleum Co Ltd on September 26. (US$1=RMB6.26). The assets include delivery and distribution platforms, a dedicated rail spur, a vehicle loading and unloading station, a 3,000-sq-m office building and the right to use 98 acres of land adjacent to the main regional rail line.
Cai Yongjun, Longwei’s chairman and CEO, said:
“The Huajie facility nearly doubles our storage capacity to a total of 220,000 metric tons and extends our reach into the fast-growing industrial region of northern Shanxi Province. We are pleased to have closed on the Huajie asset purchase using our own cash resources without dilution to our shareholders.”
Michael Toups, Longwei’s chief financial officer, said:
“We are confident we can quickly ramp up sales at the Huajie facility based on regional demand and relationships we have established. Closing on the Huajie facility has allowed us to increase our regional presence and attract new customers.
“With the addition of the Huajie facility, we have strengthened our lead as the largest non-state-owned fuel storage and distribution business in the province.”
Longwei earned net income of US $65.1 million on revenues of US $510.6 million for the year ended June 30 2012. It had assets valued at US$342.3 million and a book value per share of $3.31.