CHINA Aviation Oil (CAO) has an nounced is taking a 20 per cent stake in oil storage company, Horizon Terminals, based in Dubai.

Theannouncement, which resulted in CAO's shares gushing 13 per cent higher, details the Singapore-listed supplier of one-third of China’s aviation fuel announcing it is to take a 20 per cent stake in oil storage company Horizon Terminals, based in Dubai, in the ‘black gold’ Middle East.
The company, Horizon Terminals, is owned by the Emirates National Oil Company (Enoc). Both the Chinese and Dubai companies will then set up a joint venture firm, Horizon CAO (Singapore) Terminals, to build a US$135-million (S$229-million) oil terminal on Jurong Island.
CAO will disclose the value of the 20 per cent stake in Horizon after completing due diligence, its managing director and chief executive Chen Jiulin said.
Trading in CAO shares was suspended in the morning ahead of the announcement. When it resumed after lunch, investors snapped up its shares, causing the counter to gain 13 per cent.
Horizon Terminals, formed in April last year, has oil terminal operations in Dubai, Egypt and Djibouti.
‘The oil terminal business is a stable one and the company has posted net profits of about $10 million last year. We expect net profits to be between $10 million and $12 million annually,’ said Enoc chief executive Yusr Sultan.
CAO will have access to Horizon’s terminal operations and to cheaper oil from the Middle East.
‘‘We need stable import sources to meet higher demand from China,’’ Mr Chen said.
He expects consumption of jet fuel in China to rise to 7.5 million tonnes next year and hit 10 million tonnes by 2007, against this year’s estimated demand of seven million tonnes.
Meanwhile, the first phase of the oil terminal project on Jurong Island is expected to start by January 2006.
It will include a 500,000 cu m bulk liquid terminal for petroleum, chemicals and vegetable oil products.
The project could be expanded to handle liquefied petroleum gas, bitumen, lubricating oil and other industry-related products. The terminal will have two jetties to handle vessels of up to 175,000 tonnes.