VOPAK: Expansion of Tianjin terminal + LNG rumour

Expansion of Tianjin Lingang terminal (China)
Vopak and its 50/50 JV partner Bohai will develop the second phase of Vopak Terminal Tianjin Lingang, consisting of 240,000 cbm of storage capacity for LPG. The new capacity is expected to be commissioned in 2Q13. The first phase comprises 95,300 cbm for storage of chemicals, which is expected to be commissioned in 3Q11. The second phase will add circa 0.8% to gross network capacity and circa 0.5% to net capacity.

About Tianjin
“Tianjin is considered the main logistics gateway to Beijing, less than 150km away, and is one of the major petrochemical distribution centers in northeast China. The Lingang Industry Park in Tianjin is a rapidly developing industrial area of 80 km2. With these developments in Tianjin as well as other announced projects currently under construction, total storage capacity of Vopak’s Chinese network will grow from 1.2m cbm to 1.7 m cbm in 2013”

Our view
In view of the numbers involved, the impact should have a small positive impact on future earnings. Vopak’s strategy of only adding new capacity that is backed by firm contracts implies there is little risk involved re utilization.

Rumour on Fos-sur-Mer LNG terminal
French newspaper Les Echos reports that the JV between Vopak (90%) and Royal Dutch Shell (24,67 EUR, 0,37%) (10%) –set up in 2009 to study the potential for an LNG import terminal in Fos-sur-Mer in the south of France - has decided to go ahead with their plans to build such a terminal. The investment is said to amount to € 800m with completion scheduled for 2016. As usual, Vopak does not comment on rumours. The LNG terminal, however, is subject of study.