March 16, 2012 [Reuters] - China, the world's second largest oil consumer, on Friday began building a state petroleum reserve (SPR) facility in northeastern Jinzhou city that is set to start operations by the end of 2015, the China National Petroleum Corp (CNPC) said.
Jinzhou, one of eight bases comprising the second phase of the SPR, is the first underground storage facility built by CNPC, the company’s pipeline division said on its website (www.cpp.cnpc.com.cn).
Since late last year, CNPC has begun to use two bases of the second phase of the strategic reserve in the country’s landlocked northwest – Dushanzi in Xinjiang region and Lanzhou in Gansu province.
An estimated 17 million barrels of crude oil, or around 190,000 barrels a day, have flowed into both commercial and strategic tanks in Dushanzi and Lanzhou, industry sources have told Reuters.
The International Energy Agency said in its February report up to 79 million barrels of new storage could be available in 2012 in China, which would imply an extra 220,000 bpd of crude demand, should China decide to fill the reserve steadily during the year.
Liu Tienan, head of the China National Energy Administration, told reporters last week China would “push forward” with building phase-two strategic oil reserve sites.
Asked if it was a good time to fill SPR tanks at current oil prices, Liu said that depended on market conditions.
China completed the filling of its first phase of SPR tanks in early 2009.
