China starts site selection for 3rd phase of oil reserves
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An armed police officer stands guard near large oil tanks at Zhenghai National Oil Reserve Base in Ningbo, Zhejiang province. China started to build oil reserve bases as early as 2003 to offset supply risks and reduce the impact of fluctuating energy prices. |
Chongqing Municipality's Wanzhou District, Hainan Province and Hebei Province's Caofeidian Industrial Zone are expected to be selected as oil bases in the third phase of China's strategic oil plan, said Kou Zhong, deputy director of China Petroleum Planning and Engineering Institute.
According to preliminary estimates, China will invest 80 billion yuan in strategic oil base construction and 350 billion yuan in oil and gas distribution pipelines over the next five years. By 2015, the combined length of China's oil and gas pipelines is expected to reach about 140,000 kilometers. By 2020, China is expected to have stored approximately 85 million tons of crude oil, equivalent to 90 days of net oil imports, Kou said.
China started building its national strategic oil reserves in 2004. The first phase consisted of four oil bases in Zhejiang Province's Zhoushan and Zhenhai, Liaoning Province's Dalian and Shandong Province's Huangdao. Phase 1 began operations in 2008 and has approximately 14 million tons of oil, equaling more than 10 days of net oil imports. Along with the country's commercial oil reserves, which holds an amount equivalent to 21 days of imports, China's has more than 30 days of oil imports in its total oil reserves, Kou said.
Construction on the second phase of oil reserves is well under way. China plans to build eight oil bases in Guangdong Province's Zhanjiang and Huizhou, Gansu Province's Lanzhou, Jiangsu Province's Jintan, Liaoning's Jinzhou and Tianjin Municipality. The second phase is expected to be completed in 2012. By then, China will have 274 million barrels of oil in reserve.
China's business press carried the story above on Wednesday. China.org.cn has not checked the stories and does not vouch for their accuracy.
