10966 - Zhong Chen Energy

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Environmental Review Summary

Project Number

10966

Company Name

ZHONG CHEN ENERGY STORAGE COMPANY LTD

Date ERS Disclosed

Aug 2, 2001

Country

China

Region

East Asia and the Pacific

Environmental Category

B - Limited

Status

Completed

Previous Events

Approved : Apr 15, 2002
Signed : Mar 20, 2004
Invested : Sep 1, 2004

Sector

All Other Chemical Product

Industry

other

Department

Regional Industry - MAS Asia & Pac

Project Description

The project is to construct and operate a 50,000 tons of low temperature and normal pressure liquefied petroleum gas (LPG) storage tank farm and other related utilities and onsite facilities. The facility will be able to transfer 500,000 tons of LPG annually at completion, and will be the largest LPG storage, transfer and distribution base in Jingtang Harbor, Hebei Province, Northern China. The project''s scope of business includes (i) importing LPG and selling domestically in bulk; (ii) a 1,500 bottles per day filing capacity; (iii) propane and butane storage; and (iv) production of LPG mixes according to customer specifications. The Sponsor has completed the first phase, which includes a 30,000 tons berth, four 500-ton spherical tanks, four 50-ton horizontal tanks, utilities and other onsite facilities. The first phase is expected to be in commercial operation late in year 2001.

The project, at completion, will allow large tonnages of imported LPG to be transported directly to Zhong Chen terminal. The project will alleviate the supply shortage of LPG, and addresses the inefficiency and inadequacy of the existing LPG import, breakbulk and storage system in Northern China.

Environmental and Social

The sponsor has presented plans to address these impacts to ensure that the proposed project will, upon implementation of the specific measures agreed, comply with applicable host country laws and regulations and World Bank/IFC requirements. The information about how these potential impacts will be addressed by the sponsor/project is summarized in the following paragraphs.

The Project is to develop a two-phase Liquid Petroleum Gas (LPG, consisting of propane and butane gas) terminal, Phase I of which is currently under final authority inspection and ready for commissioning. Phase I consists of four spherical high pressure liquid butane and liquid propane storage tanks and four smaller bullet pressure tanks for the preparation of commercial LPG blends for the market. The plant site is fully developed including a 30,000t berth for import of liquefied gas, high pressure LPG storage and blending facilities, and the tank truck loading facilities for the local market. The plant also include gas bottling facilities. The second phase will include the construction of two 50,000 cubic meters (25,000 tons each) cryogenic (cold) LPG tanks. This will allow the terminal to efficiently receive cold LPG, which will be stored at normal pressure. Phase two will also include the equipment needed to move the gas from the cryogenic storage to normal temperature high pressure storage, ready for blending and sale on the local market. Phase two will result in a capacity increase from 48,000 tpa to 500,000 tpa. The LPG will substitute other local fuel sources, mainly coal and will thereby have a significant positive influence on air pollution. It is also possible that some of the gas will be used for conversion of vehicles from gasoline to LPG fuels. Such a conversion will also, with the current technology result in significant air emission reductions.

The project is located in the Jingtang Port. This new port development is important for the support of the Tianjin and Beijing high population areas. The Jingtang Port development started in 1988, and the first international shipping was received in 1993. Since then the port has been under constant development within the initial allocated land. At the time of the initiation of the Zhong Chen gas terminal project eight berths were in operation, and the breakwater east of the main navigation channel was finished, while the breakwater west of the navigation channel was partly finished. The western breakwater has since been finalized by the harbor authorities with funding provided by the first phase of the gas terminal project. The gas terminal is located at the mouth of the harbor. The gas terminal berth is separated from the main navigation route by a 500 meters turning circle to be used by the LPG ships. The dredging spoils from the preparation of the turning circle and the dredging in front of the berth has been used partly for raising the site level and partly for filling at other development areas within the harbor.

An EIA covering both phase I and phase II of the gas terminal project was prepared in 1996. The EIA is comprehensive and covers both engineering, biological baseline studies, terminal impact, and risk assessment aspects of the project. The assessment benchmark the projects impact against Chinese regulations, and provides details which has allowed for a technical comparison against the World Bank Policy 4.01 on Environmental Assessment and the latest World Bank guidelines. The initial project complied with these policies and guidelines, and the expanded project will continue to do so.

The local infrastructure is well developed to handle the gas transport. The port has main highway access. Rail access is also available but not likely to be used for this project. An existing 2.8 kilometer road within the port area is currently in poor conditions and must be upgraded before the road transport of the gas can be initiated. Power and water is supplied by public utilities. The port does not yet have its own sewage treatment facility.

Due to the gas terminal being located at a remote corner at the mouth of the harbor it has a maximum distance (~ 2 kilometers) to residential areas and good separation from other harbor tenants. Hereby the terminal is not likely to be able to create any domino effect even in the event of a major gas release accident. The terminal is equipped with fixed water canons and water deluge systems at the berth and the storage facilities, and has hydrants available in all other locations. The fire water tanks at the site hold water for two hours maximum operation of the fire water pumps. The fire water pumps are electrical, with a diesel driven pump to be installed for backup. The terminal will further, as part of phase II be equipped with a flare system to ensure destruction of accidental gas releases and will also acquire two fire engines. Emergency planning is carried out in cooperation with the harbor authorities, and all fire fighting systems will at regular intervals be tested in fire drills. In phase I only emergency shut off valves are automatic (fail safe), while the second phase will include full automation of the operation and hereby further improved safety.

All gas will be received and distributed through air tight lock connections. However, each connection and disconnection operation release a few grams of gas. Based on the anticipated number of ship un-loadings and truck loadings an annual release of approximately 150 kilograms of gas has been estimated. Dispersion modeling has indicated that the combined Phase I and II of the gas terminal project will result in a 1.5% increase to 0.335 mg non-methane hydrocarbons/cm in the baseline concentrations at the project boundary. The World Bank guidelines for gas terminals does not have a specific ambient non-methane hydrocarbon limit, while the British standard used in the EIA preparation allows for up to 4.0 mg/cm, or 12 times the predicted levels.

The two boilers to be used for heating of the gas during the cryogenic to pressurized gas transformation are LPG fueled and equipped with German technology low-NOx burners.

All storm water drains are equipped with sand and oil traps, for control of rainwater before discharge to the harbor. Domestic sewage is collected in a 100 cubic meter septic tank and is removed by vacuum trucks to an off-site sewage treatment plant. It is anticipated that the harbor will construct a sewage treatment plant in the future, and that the gas terminals domestic wastewater at that time will be connected to this system.

The gas terminal will have compressors and pumps, which require personal hearing protection when working in the vicinity of the equipment. However, the terminal will operate well within the World Bank guidelines of 70 dBA at the fence line. The terminal will need a minor deviation from the Chinese night time noise limit of 55 dBA. The background noise levels at the fence lines have been registered as 50.3-63.7 dBA, due mainly to breaking waves, and the plant is expected to be able to operate within the Chinese standard daytime noise level of 65 dBA.

No solid waste is generated by the operations and domestic solid waste will be handled by city contractors.

Approximately 75 persons will have full time employment at the terminal.

Conclusion & Monitoring

This Environmental Review Summary (ERS) is prepared and distributed in advance of the IFC Board of Directors' consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board of Director’s decision. Any documentation that is attached to this ERS has been prepared by the project sponsor or in conjunction with the project sponsor and authorization has been given for public release. IFC has reviewed this documentation and considers that it is of adequate quality to be released to the public but does not endorse the content. The following ERS is disclosed in accordance with IFC's Disclosure of Information Policy that went into effect September 1998.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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