LONDON Oct 15 In the first major move by a Chinese state company into European oil storage, Sinopec has bought a half stake in tank company Vesta Terminals through a joint venture with Mercuria, the Swiss-based trading house said on Monday.
Sinopec Kantons Holdings, a unit of state-owned Sinopec, will pay Mercuria an undisclosed sum for 50 percent of Vesta Terminals, giving it access to the company's 10 million barrels of oil products storage in Tallinn in Estonia, the Dutch port of Vlissingen and Antwerp in Belgium.
"It is the first major move by a Chinese state-owned enterprise into the European oil storage market," Paul Chivers, Mercuria Group Chief Investment Officer, told Reuters.
"We believe this deal offers us the best potential for future expansion," Chivers said by telephone from Beijing where the deal was signed on Monday.
Chinese oil companies are increasing active in Western markets, expanding into crude and products trading and buying strategic infrastructure.
Sinopec unit Unipec is already a dominant player in the West African crude oil market and Petrochina , the listed arm of China's biggest oil producer, China National Petroleum Corp. (CNPC), is also expanding quickly in Europe.
Petrochina is ramping up oil trading via a joint venture with Ineos Group Ltd, which owns refineries in Britain and France.
But this is the first significant move by a Chinese state company into the lucrative oil storage business in the region.
"China is a strategic cornerstone of Mercuria," Chivers said. "We are delighted we can seal this deal with a major player. It will give us a significant platform in the future.
"Partnerships and joint ventures make most sense to develop these types of businesses: they are very capital intensive, require significant resources globally and substantial access to finance," Chivers said.
Vesta Terminals stores a range of oil products, including fuel oil, middle distillates such as gasoil, as well as naphtha, mainly used as a petrochemical feedstock, and biofuels.
Mercuria, with headquarters in Geneva, is one of the world's top five energy trading houses and has this year expanded its Chinese operations with new commodities trading units in base metals, iron ore and coal. (Editing by James Jukwey)