Little impact on Dalian shares

The pipeline explosion occurs in Xingang area of the Dalian Port. [Li Qiang / China Daily]

BEIJING - Dalian Port (PDA) Co, China's largest crude-oil terminal operator, witnessed its sharpest share price drop in two months on Monday after a pipeline explosion caused a major oil spill off the coast.

The share price of the Hong Kong-listed company dropped by 5.06 percent, the biggest decline since May 19 to HK$3.00.

This incident occurred during offloading of an oil tanker late on July 16, and "seriously" polluted an area of sea covering 11 square kilometers by leaking 1,500 tons of oil into the sea. The blast didn't result in direct losses for the company's main infrastructure, said the port operator in a statement on Monday.

"But some supporting facilities such as pipelines and control systems were damaged, therefore its impact on PDA as well as Dalian PetroChina Transport and Storage Co will require further evaluation," it said.

The port owns a 20 percent share of Dalian PetroChina Transport and Storage Co, a joint-venture between the port operator and PetroChina, the world's second-largest company by market value.

"It is very natural that the event will affect (PDA's) stock performance in the short term," said Zhang Bao, a transportation analyst with Citic Securities.

He said the influence on the port's business would be quite limited and has nothing to do with its accelerated effort to get listed in the domestic A-share market.

Reuters reported on Monday that the port has closed its Xingang oil port, part of the Dalian port that is expected to delay crude oil imports as well as exports of gasoline and diesel, and shut 80-90 percent of its berths, including those for iron ore and grain imports.

But Zhang said "traffic control" would be more precise as it is trying to maintain normal businesses by guiding ships around the spill area and anchor in designated areas. "Unloading is still going on," he said, adding the blast won't affect PDA's value for long-term investors.

Kang Shuchun, managing director of China Shipping and Port Academy, said it is still "too early" to talk about economic losses as the actual cause of the event is still under investigation.

"I see little possibility that the port will be burdened with business losses as the costs of pipeline repairs as well as the cleanup are very likely to go to PetroChina or the foreign shipping firm," he said.

Dalian port received 13.89 million tons of foreign crude in the first five months of the year, up 87 percent from a year earlier.

The volume makes up nearly 15 percent of China's total crude imports and ranks the second largest in volume after eastern China's Ningbo port.

The port is also the largest port for gasoline exports, with approximately 200,000 tons shipping out each month, data showed.

It is the second largest container transshipment hub in China.