Longwei Petroleum Investment Holding has announced the commencement of operations at its Huajie fuel storage depot in northern Shanxi Province in China.

The company has received the first shipment of petroleum and started selling products on the 11 October.

The new fuel storage depot has a 100,000t storage capacity and is located in Xingyuan Township, Fanshi County.

Longwei Petroleum acquired the storage asset from Huajie Petroleum on 26 September 2012, for a total of $110.6m.

Assets include fuel storage tanks with a 100,000t capacity, with accessory facilities and equipment; delivery and distribution platforms, including a dedicated rail spur; and a vehicle loading and unloading station.

The purchase also included a 3,000m² office building and land use rights for 98 acres of land adjacent to the main regional rail line.

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Longwei Petroleum Investment Holding chairman and chief executive officer Cai Yongjun said the Huajie facility nearly doubles the company’s storage capacity to a total of 220,000t and also extends their reach into northern Shanxi Province.

"We are pleased to have closed on the Huajie asset purchase using our own cash resources without dilution to our shareholders," said Yongjun.

Longwei Petroleum Investment Holding chief financial officer Michael Toups said the company can ramp up sales at the Huajie facility based on regional demand.

"Closing on the Huajie facility has allowed us to increase our regional presence and attract new customers," said Toups.

"With the addition of the Huajie facility, we have strengthened our lead as the largest non-state-owned fuel storage and distribution business in the province," he added.