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Brightoil Petroleum (Holdings) Limited. has announced that its wholly owned subsidiary, Brightoil Petroleum Storage (Zhoushan) Co., Ltd., has signed a construction contract with China Petroleum Pipeline Bureau to build the first phase of oil storage facilities on Waidiao Island in Zhoushan, Zhejiang Province.

Located on Waidiao Island, the Zhoushan Waidiao Island Project will have a total capacity of approximately 3.2 million cubic metres (cbm). The project will be developed in two phases.

With a storage capacity of approximately 1.94 million cbm for fuel oil, petroleum, diesel fuel, jet fuel and chemical products, Phase I of the project is scheduled to start commercial operations in the second half of 2014.

Phase II of the project, which has a capacity of approximately 1.22 million cbm, is slated to begin full commercial operations in the second half of 2015.

According to the construction contract, China Petroleum Pipeline Bureau will carry out the construction works for oil storage facilities for Phase I of the Zhoushan Waidiao Island Project. The construction is expected to take 16 months and to be completed by the end October 2014. The contract price is RMB1.32 billion.

Dr. Sit Kwong Lam, Chairman & CEO of the Group, said: "We are pleased to sign the cooperative contract with China Petroleum Pipeline Bureau, which marks an important milestone in the development of our oil storage and terminal facilities business. Zhoushan is emerging as a major petrochemical and trading hub for East China and is strategically located to support the import and regional trade for the greater Yangtze River Delta region. It creates synergies with our project on Changxing Island in Dalian, an oil storage and facilities project under development. The commissioning of these two projects will bring us stable revenue from oil storage as well as oil trading opportunities. Looking ahead, the group will continue to actively expand its oil storage and terminal facilities business while considering additional storage facilities to consolidate our competitive strength and create stable return to our shareholders."