China will start to fill its strategic oil reserve in the fourth
quarter of this year with its own oil, according to sources with
the administration of one of the reserve bases on Friday.
According to Zhenhai Strategic Oil Reserve Administration in
east China's Zhejiang
Province, 16 oil-tank facilities will be completed by the end
of August and oil storage is expected to start by year-end.
Zhang Guobao, vice minister in charge of the
National?Development?and Reform?Commission, also
released the information about oil filling in New Orleans, the US,
on June 28.
China launched its strategic oil reserve project in 2003.
Besides Zhenhai, other three sites are Daishan of Zhoushan City in
Zhejiang, Xingang of Dalian City in northeastern Liaoning
Province and Huangdao of Qingdao City in eastern Shandong
Province.
Located near Hangzhou City, Zhenhai oil reserve base will house
52-tank facilities with a storage capacity of 5.2 million cubic
meters, the largest among the four sites.
According to the plan, construction work of the four bases will
be finished by the end of 2008. The strategic oil reserve and the
reserve stored by oil enterprises combined?are set to be on a
par with the country's 30-day oil imports, sources said.
Establishing a strategic oil reserve is an indispensable measure
to safeguard China's oil security and reduce risks concurrent with
oil price fluctuation, said Feng Fei, an expert from the State
Council's Development and Research Center (DRC), during a recent
interview with Xinhua.
According to Feng, China has to pay additional billions of US
dollars in purchasing oil owing to its lack of a strategic oil
reserve and oil price hike in the international market.
Developed nations across the globe started to build their own
strategic oil reserves in response to the oil crisis in the 1970s.
Currently, oil reserves of the US, Japan and Germany can meet these
countries' oil demands for 158, 161 and 127 days respectively.
As oil prices continue to skyrocket recently, oil-guzzling
developed nations all took measures to increase their strategic oil
storage. As a country whose oil demand is much lower than that of
the developed nations, China is expected to exert?very
small?impact on pushing up global oil prices following the
construction of a strategic oil reserve mechanism.
In 2004, China imported 120 million tons of crude oil,
accounting for 40 percent of the country's total oil consumption. A
forecast says China's oil demand will increase at least by 4
percent year-on-year if the Chinese economy grows by 7 percent
annually in the upcoming 15 years.
Even under such an unfavorable situation, Chinese officials have
repeatedly said China's energy strategy is to depend on domestic
production, the reduction of oil waste and improvement of energy
usage efficiency.
Insiders in the industry still debated how much oil reserve
China should keep. Gao Hedong, a senior engineer with the pipeline
storage and transport branch of China Petrochemical Corporation (Sinopec), suggested
more strategic oil reserve bases be constructed in China's inland
regions in addition to the four coastal sites.
(Xinhua News Agency July 2, 2005)