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Construction of the first phase of the Caofeidian coal wharf kicked off on Friday on the coast of north China's Hebei Province.

Once completed, the project will help satisfy south China's massive demand for coal, with over half of the nation's southbound coal 200 million tons expected to be shipped from Caofeidian.

Wang Huisheng, president of the State Development and Investment Corp (SDIC), which has a 51 percent share in the wharf, said the Caofeidian project is "of great significance because it is in line with the nation's overall strategy of economic development and energy allocation."

As the nation's largest state-owned investment company, SDIC is committed to supporting the nation's top transportation projects, by investing and holding shares in several huge port projects.

Within the next 20 years, China will continue to heavily rely on coal for energy consumption and economic development. Since most coal is from northern and western China, it is crucial to transport this strategic energy resource to the south of the country.

Construction of the initial stage of the first phase of the wharf will involve a total investment of 4.85 billion yuan (US$606 million).

"Construction of the Caofeidian coal wharf is a big event for energy and resource transportation in China. It will help transport coal from western to eastern China, and eventually from northern to southern China," said Xu Guan, a senior official from the Ministry of Communications.

The coal wharf is an important component of the gigantic Caofeidian Industrial Construction Project, a key element of the 11th Five-Year Plan (2006-10).

Located on the western shore of the Bohai Bay, Caofeidian boasts superb conditions for large-scale deep-water port construction.

The future Caofeidian harbour and industrial project will involve large terminals, steel plants, petrochemical projects, and power works, with a total investment of 200 billion yuan (US$25 billion).

The port will include four 250,000-ton mineral terminals, two 300,000-ton crude oil terminals, 16 50,000-10,000-ton coal terminals, and one 100,000-ton liquefied natural gas terminal.

(China Daily August 12, 2006)