China recruits 500 fishing ships to fight Dalian slick
Tue, Jul 20, 2010

BEIJING - China has recruited a flotilla of 500 fishing boats to help clean up an oil slick that shut one of its biggest ports, Dalian, disrupting refinery operations and diverting cargoes elsewhere, but officials said the port would not return to normal until the end of the week.

A pipeline explosion and fire hit the Xingang port, home to a 19 million barrel strategic petroleum reserve, during a tanker offloading last Friday, spilling 1,500 tonnes of crude into the sea to leave a slick covering 183 sq km (71 sq miles).

State news agency Xinhua said on Tuesday about 24 specialist clean-up vessels, together with a total of 800 fishing boats, were using dispersants and absorbants to clear up the slick.

With nearly a third of the oil now collected, it would take at least another four to five days to complete operations, the agency quoted Luan Yuxuan, deputy director of Dalian's Oceanic and Fishery Administration, as saying.

Six Very Large Crude Carriers (VLCCs), with about 12 million barrels of oil, are set to be diverted, possibly to South Korea or any one of another half-dozen VLCC terminals in China, and corn deliveries have also been forced to dock elsewhere.

But while large sections of Dalian's port facilities - spread out along the tip of the Liaodong peninsula - have been shut, deliveries of imported soybeans remain unaffected, a government-backed think tank said on Tuesday.(ID:nTOE66J01E)

"The only impact we have felt so far is one of our ships had to pay a clean-up fee," said a Dalian-based soy crusher, adding that its operations and imports had remained normal.

But ships delivering corn cargoes to Dalian are being diverted to the nearby ports of Jinzhou and Bayuquan, where warehouse space is expected to be sufficient, the China National Grain and Oils Information Center said.

The Dalian customs authority has handled about 10 percent of China's soy imports so far this year, with $175 million worth arriving in May, the last month for which figures are available.

Besides the strategic reserve, one of four state storage bases already in operation, Dalian's Xinjang port is home to commercial storage run by CNPC and Petrochina 0857.HK that may be even bigger.

It is also a transfer spot for two major refineries, Dalian Petrochemical Corp and WEPEC, both operated by PetroChina, with a combined processing capacity of 600,000 barrels per day (bpd).

PetroChina has set up a contingency plan to cope with one week's closure of the main oil port that receives crude shipments regularly and is also an export hub for gasoline and diesel.

The aftermath of the weekend fire could stoke pressure for stricter environmental standards in China, already reeling from a toxic copper mine leak in its south that burst into the headlines last week amid accusations of a cover up.

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