TAIYUAN CITY, China, Dec. 17, 2010 /PRNewswire-Asia-FirstCall/ -- Longwei Petroleum Investment Holding Ltd. (NYSE Amex: LPH) ("Longwei" or the "Company"), an energy company engaged in the storage and distribution of finished petroleum products in the People's Republic of China ("PRC"), today announced that it intends to expand its petroleum storage capacity in 2011 to keep up with growing demand for petroleum products in its region.
The Company wishes to clarify to its shareholders that it has no intention of raising capital at current price levels and would only issue shares in the future to make an accretive acquisition that would increase storage capacity, revenue and earnings.
"We are actively exploring strategic opportunities to take advantage of the growth in the marketplace. Our last acquisition has proven to be very successful, and we want to be prepared as we position the Company to expand our offering and customer base," stated Mr. Cai Yongjun, Chairman and CEO of Longwei.
The China Petroleum Planning and Engineering Institute recently announced that China plans to increase its oil storage capacity to 78 million cubic meters (approximately 67 million metric tons) by 2015. China had oil storage capacity of 53 million cubic meters at the end of last year and anticipates this to grow by 47% by 2015. China's two largest state-owned oil companies, CNPC and Sinopec, are expected to have 50 million cubic meters of storage capacity by 2015, while independent operators are expected to grow storage capacity to 28 million cubic meters by 2015. China has emphasized expanded oil storage and refinery capacity to increase its strategic reserves, which make it less vulnerable to market fluctuations and less susceptible to international oil conflicts.
Michael Toups, CFO of Longwei, said, "China is not only dependent on its two state-owned oil companies to increase storage capacity, but it needs independent operators to actively grow their businesses as well. We are well-positioned as the largest independent oil storage operator in Shanxi Province to continue to build our storage capacity and grow our distribution within the surrounding regions."
About Longwei Petroleum Investment Holding Limited
Longwei Petroleum Investment Holding Limited is an energy company engaged in the storage and distribution of finished petroleum products in the People's Republic of China. The Company's oil and gas operations consist of transporting, storing and selling finished petroleum products, entirely in the PRC. The Company's headquarters are located in Taiyuan City, Shanxi Province. The Company has a storage capacity for its products of 120,000 metric tons located at storage facilities in Taiyuan and Gujiao, Shanxi. The Company's Taiyuan and Gujiao facilities can store 50,000 metric tons and 70,000 metric tons, respectively. The Company is 1 of 3 licensed intermediaries in Taiyuan and the sole licensed intermediary in Gujiao that operates its own large-scale storage tanks. The Company has the necessary licenses to operate and sell petroleum products not only in Shanxi but throughout the entire PRC. The Company's storage tanks have the largest storage capacity of any non-government operated entity in Shanxi.
The Company seeks to earn profits by selling its products at competitive prices with timely delivery to coal mining operations, power supply customers, large-scale gas stations and small, independent gas stations. The Company also earns revenue under an agency fee by acting as a purchasing agent for other intermediaries in Shanxi, and through limited sales of diesel and gasoline at two retail gas stations, each located at the Company's facilities. The Company seeks to continue to expand its customer base and distribution platform through the utilization of its large storage capacity, which allows the Company the flexibility to take advantage of pricing, supply and demand fluctuations in the marketplace.
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Certain statements contained herein constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations, estimates and projections about Longwei's industry, management's beliefs and certain assumptions made by management. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Because such statements involve risks and uncertainties, the actual results and performance of the Company may differ materially from the results expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Longwei's operations are conducted in the PRC and, accordingly, are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company's results may be adversely affected by changes in the political and social conditions in the PRC and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation. Other potential risks and uncertainties include but are not limited to the ability to procure, properly price, retain and successfully complete projects, and changes in products and competition. Unless otherwise required by law, the Company also disclaims any obligation to update its view of any such risks or uncertainties or to announce publicly the result of any revisions to the forward-looking statements made here. Readers should review carefully reports or documents the Company files periodically with the Securities and Exchange Commission.
SOURCE Longwei Petroleum Investment Holding Ltd.