China's state-sponsored bunkering hub of Zhoushan is moving to compete with fuel suppliers in Shanghai and other lower Yangtze ports on their home pitch.
The "cross-port" fuelling comes with the regulatory blessing of Chinese central authorities. Beijing has a stated aim to build up Zhoushan into a bunkering hub able to compete with the likes of Singapore and Busan, and supports it with tax advantages and indirect subsidies.
At the same time, a substantial investment in onshore fuel capacity is putting Zhoushan's bunkering fleet in more economical striking distance of Shanghai's large container terminals.
An official from Zhoushan Port and Shipping Administration Bureau told TradeWinds that several physical suppliers will be able to make deliveries to Shanghai International Port Group (SIPG) terminals after the beginning of 2021.
Bunker first
Last weekend marked the first "cross-port fuel supply" operation from Zhoushan to Shanghai, when the 3,350-dwt bunkering tanker Zi Yun 1 (built 2000) visited the Yangshan container terminal to fuel the 5,662-teu Santa Vanessa (built 2005) with 1,000 tonnes of low-sulphur fuel oil (LSFO).
The Zi Yun 1 was under charter to Zhejiang Seaport International Trading Co, one of two bunkering suppliers initially approved for the cross-port business. The Zhoushan official said this number will grow when the new tank facilities open.
The municipal archipelago of Zhoushan in coastal Zhejiang province, just to the south of Shanghai, consists of hundreds of islands crowded with fishery, shipbuilding, and port facilities, many on reclaimed shoreline and granite crags blasted flat in the service of industry. Administered together with Ningbo, the shoreside city that faces Zhoushan, the port is China's largest but mostly focused on industrial imports and bulk transshipment, while Shanghai's port business is more liner goods and exports.
The Ningbo-Zhoushan port is already a busy bunkering hub, but fuel storage facilities are at the end of the far-flung Zhoushan archipelago from Shanghai.
Fresh storage
However, in May, Zhoushan Energy Group opened a new tank farm at Huangzeshan in northern Zhoushan, not far from SIPG's Yangshan deepwater terminal.
The Huangzeshan Oil Storage and Transportation Base, with berths for tankers of up to 300,000 dwt, is so far only open for crude storage. But the Zhoushan official said it will open for marine fuel and other clean products around the beginning of 2021. It will initially have room for 1m cbm of crude and 510,000 cbm of refined products.
Yangshan, SIPG's most modern terminal, is built on islands that are connected by bridge to the Shanghai mainland but actually inside the Zhoushan city limits, although under Shanghai's port administration. With bureaucratic obstacles to inter-port trading out of the way, the physical distance to Zhoushan's fuel depot is less than to competitors in Shanghai, the official said.
