1.Project Site

The Western Area of Yantai Port is situated in the west of the city proper, as well as besides the northeast sea of DajijiaVillage in Yantai Economic & Technological Development Zone (YETDZ), with a distance of 35 km on the sea and a distance of 30 km on land to ZhifuBay. The proposed crude oil terminal is located in the northeast of the western port area.

2. Project Scope

Three conventional berths of 50,000-100,000 DWT shall be built under this project, with an alongside water depth of –14.5 meters, a total quay length of 950 meters and a designed annual traffic capacity of 8 million tons. The project is to be commenced in 2006. One berth is expected to be finished by the end of 2007, while the other two will be completed in the first half of 2008.

3. Project Progress

The planning of the quay line under this project has been approved by the relevant governmental authorities. And now the preliminary design documents have been submitted to higher authorities for review and approval.

4.Traffic Analysis

YEDA is endeavoring to attract two projects to settle down in this area, one is an alumina processing project of Aluminum Group of China (with an annual product capacity of 1.2-1.4 million tons), and the other one is LS copper smelting project. It is estimated that these two projects will bring about 3.5 million tons of imported bauxite, 2.5 million tons of fine copper mine and 1.5 million tons of exported alumina per annum. Furthermore, this terminal can also be used for handling operations of coal export and some bulk cargo transferred from Zhifu Bay Port Area. In this view, the estimated annual throughput is projected at over 8 million tons.

5.Distribution and Transportation Conditions

Railway:The inner-port railway, connecting with the national railway network through Lancun-Yantai railway, possesses an outstanding transport capacity. Meanwhile two additional railway lines (i.e. Dezhou-Longkou-Yantai and Huanghua-Longkou-Yantai) are under construction and will be fully completed for operation in 2008.

Road: According to the planning, several port access roads will be integrated with the provincial road network by direct connection with Tongjiang-Sanya Expressway, Weihai-Wuhai Expressway and No. 206 National Road.

6.Investment

The total investment of the project is estimated to be RMB 1 billion yuan.

7.Cooperation Partners

For the purpose of this project, we are willing to cooperate with the famous logistics service providers, shipping companies, terminal operators and investment companies all over the world.

8.Cooperation Mode

A limited company shall be established by relevant parties for the construction and operation of the terminals.

9.Preferential Policies

According to the Catalogue for the Guidance of Foreign Investment Industries issued by the State Government, this project shall be included in the Catalogue of Encouraged Foreign Investment Industries. Foreign-funded enterprises which are engaged in the construction of public dock facilities of ports and scheduled to operate for a period of over 15 years shall, upon approval by relevant taxation administrations, be exempt form enterprise income tax for the first to the fifth profit-making years, and will be subject to a 50% reduction of enterprise income tax form the sixth to the tenth years.

In case a foreign-funded enterprise that is encouraged by the state to develop imports self-use equipment, it will be exempted from duties and value added tax. When a foreign invested enterprise procures domestically manufactured equipment and when the value of such purchase is within the total amount of investment, the full amount of value-added tax on such domestic equipment will be refunded and regarded as a creditable amount in business income tax.

Since the project site is within the jurisdiction of Yantai Economic & Technological Development Zone (YETDZ), in addition to the relevant preferential policies formulated by the State Government, the project will be granted more preferential treatments, which are stipulated for the national level Economic & Technological Development Zones, in terms of taxation, land utilization and infrastructure facilities.

To promote the development of WesternYantaiPort, Yantai Municipal Government has formulated a series of preferential policies in respect of the utilization of land and sea area as well as the construction of infrastructure.

10.Supporting Facilities & Conditions

• Water supply: There is a independent water supply system in this area, the capacity of which is 200,000 cubic meters per day and will be increased to 300,000 cubic meters per day according to the “11th Five-Year-Plan”.
• Power supply: In the project area, power is supplied by a dual circuit (i.e. Huabei Power Network and Shandong Power Network.) so that the power resource is sufficient. Now there are one substation of 220KV, 8 substations of 110KV and 5 substations of 35KV. According to the planning, another 3 substations of 110KV are to be built up specially for this project in the future.
• Heating: At present, there are two thermo-electric plants in Yantai Economic & Technological Development Zone (YETDZ), with a capacity of 360 tons per hour.
• Natural gas: The existing capacity of natural gas is 380,000 cubic meters per day.

11.Contact

For any further questions and information, please contact us at:

Strategic Planning Dept.

Yantai Port Group Co., Ltd.

155 Beima Road, Yantai 264000

Tel.:0086-535-6742151, 6743527Fax:0086-535-6742151

E-mail:liushaoli@yantaiport.com.cnalexsun1970@yahoo.com.cn