Sun Longde, vice president of PetroChina Co., said construction on the first phase of the reserve base, with a capacity of 3 million cubic meters, is expected to be finished in October 2010.
The first phase costs 2.65 billion yuan (388 million U.S. dollars) and covers 95 hectares.
The 30 oil tanks, with each having a capacity of 100,000 cubic meters, will be filled up mainly by the crude from Kazakhstan and Russia, Sun said.
PetroChina Dushanzi Petrochemical Co. has earlier built a 1.4-million-cubic-meter commercial oil reserve.
China had filled up the first phase of four strategic oil reserves in Zhenhai, Huangdao, Dalian and Zhoushan by earlier the year, according to the National Energy Administration.
The government plans to build up oil reserves amounting to the equivalent of 100 days of imports by 2020 after finishing filling up the second and third phases of strategic oil reserve bases.
China also started building another six energy projects in Xinjiang on Thursday, including three power plants, a power grid, an LNG (liquefied natural gas) plant, and a coal mine.
Zhang Guobao, head of the National Energy Administration, said the seven projects have a total investment of more than 23 billion yuan and will create 6,000 jobs and generate 2 billion yuan in profits and taxes annually.