Dalian port, on the Bohai Sea, has an excellent natural deepwater harbour, measuring 12 metres at its shallowest point. Strategically located in the north, it acts as a gateway to China’s industrial north-east. The port handles bulk shipments as well as container cargo. It also features China’s biggest oil terminal. Freight rose 17% to 170m tonnes in 2005, while container shipments grew to 2.6m TEUs from 2.25m TEUs in 2004.

Dalian is one of three major ports in China’s north-east. Its facilities consist of the historical Port Arthur in the downtown area, developed in 1899 during the Russian occupation, and a modern port, which opened in 1992 at Dayao Bay. The port has the potential of becoming one of the largest in China, with 80 berths currently. Two 300,000-tonne crude-oil terminals went into operation in September 2004, facilitating the distribution of iron ore and some 9.5m tonnes of oil by rail annually.

Foreign investors have been active in the port’s expansion. Phase one of the development, with ten berths, has been completed. In 2005, two berths in phase two were opened—the first of a six-berth project built by the Dalian Port Authority, COSCO Pacific, AP Moller of Denmark and PSA of Singapore. The other berths are due for completion by 2008. In October 2005, HPH signed an agreement with Dalian Ports Corp to build a US$272m iron ore terminal. Singapore’s PSA Group has also taken a 50% stake in the third phase of the port expansion programme, offering further capacity of 3.2m TEUs.

Dalian Port raised US$270m from its IPO in Hong Kong in April 2006 to finance port construction. Upon completion of phase three in 2010, freight capacity and container handling capacity will rise to 150m tonnes and 10m TEUs.

Dalian Dagang Container Terminal, the third JV between PSA and Dalian Port Authority, operates a container terminal to provide inter-modal freight transport into the north-east, including Shenyang and Harbin. The port is the country’s largest port-rail through-transport facility.

Table 12.7.5