Summary of Proposed Investment
Project Number
7070
Company Name
Caltex Ocean Gas & Energy Ltd.
Date SPI Disclosed
Mar 8, 1996
Country
China
Industry
Manufacturing
Status
Completed
Sector
Other Petroleum and Coal Products
Department
Regional Industry - MAS Asia & Pac
Environmental Category
A - Significant
Previous Events
Approved : Jun 28, 1996
Signed : Jul 6, 1998
Invested : Aug 18, 1998
Project Description
Summary Of Project Information (SPI)
| Project Name | China-Caltex Ocean Gas and Energy Company Limited |
| Region | Asia |
| Sector |
Projected Board DateApril 8, 1996
Company NameCaltex Ocean Gas and Energy Company Limited (“the Company”)
Technical Partner and/or Major Shareholders
Caltex China Limited (or its nominee) which is a 100% subsidiary of Caltex Petroleum Corporation, will hold 60% of the equity. Shantou Ocean Enterprises Petroleum and Petrochemical Company Limited (or its nominee), which is a subsidiary of Shantou Ocean Enterprise (Group) Company, will hold 40% of the equity.
Project Cost Including proposed IFC investment
The project cost is up to US$ 146 million of which IFC investment is up to $102.2 million, which comprises the “A” loan of up to $24.9 million, the “B” loan of up to $70 million, and the “C” loan of up to $7.3 million. The “C” loan is subordinated to the “A” and “B” loans.
Location of project and Description of site
The project is located in Shantou, Guangdong province, on China’s southern coast. The project will be built on a site of 57,000 square meters in Shantou’s Da Hao District, part of an industrial area in which a deep water port, power plant, petrochemical works, tank farms and storehouses are planned to be developed by 2010.
Description of Company and Purpose of Project (include IFC role\development impact)
The Company is a Sino-foreign venture limited liability company to be incorporated in China. The project plans to establish world-scale cavern and a breakbulk terminal facility for liquefied petroleum gas (“LPG”) to address growing LPG imports, particularly in South China, and the inefficiency and inadequacy in the existing LPG import, breakbulk and storage system.
The project is in line with IFC’s strategy to catalyze large, high-quality investments by world class sponsors through limited recourse financing. This project is also consistent with IFC’s plan to support projects which have direct, positive environmental impacts. By helping make LPG more readily available, this project could further encourage the substitution of LPG for coal and wood, thereby reducing air pollution in China. The project is expected to have strong development impact:
- it could help China make significant savings on foreign exchange; and
- construction of the project is expected to take 2 years and could provide jobs to up to 1,000 persons, most of whom will be local residents.
During its operation phase, the project expects to employ about 58 staff.
Environmental Category and Issues
This is a category A project according to IFC''s environmental review procedure. Environmental and occupational and health issues associated with this project include site locations, previous and existing land use, impact on the marine and terrestrial environment, wildlife and coastal resources, air emissions, waster water and solid waste management, fire and explosion prevention, emergency response, and public consultation and disclosure. The sponsors have prepared a full comprehensive environmental assessment. As described in the environmental assessment, the project will be designed, constructed and operated in a manner consistent with Caltex and industry standards as well as World Bank policies and guidelines to minimize any impact to the environment. The project is located within the Shantou Economic Development Zone designated for industrial development. The site is on the coast in an area characterized by granite formations with very sparse vegetation. The land utilization after construction of the underground caverns will be low and impact on the terrestrial environment will be limited. The sea bed around the terminal and jetty is mainly granite formations covered with sediments from a nearby river and not of special ecological value. The site and the sea in front of the terminal is not used by the local villagers or fishermen and no resettlement will be necessary. The terminal will be designed, built and operated according to state-of-the-art technology, and will be able to withstand potential seismic activities in the area. Further, the terminal is located with a protective granite hill in between the facility and residential areas. Public information on the general development of the area has been carried out by the local authorities and a project specific public meeting was held in January, 1996 after announcement on the front page of the local newspaper. Local leaders, fishermen and villagers participated in this meeting in which the environmental assessment was discussed. The environmental assessment has been disclosed locally. IFC will ensure ongoing compliance with World Bank guidelines during the term of IFC investment by evaluating monitoring reports submitted annually to IFC by the Company and by conducting periodic supervision.
The are from the Public Information Center.
| Host country location of environmental documents | Shantou Ocean Enterprises’ Offices No. 2 Longyan North Rd. Shantou, Guangdong, China |
Date SPI sent to PIC March 8, 1996
For Additional Information contact:
Corporate Relations Unit
Telephone: (202) 473-3800
Fax: (202) 676-0365
Environmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).
Sponsor / Cost / Location
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