June 9, 2011 [Reuters] - China has asked its two oil majors, CNPC and Sinopec Group, to accelerate expansion of commercial oil storage facilities to secure domestic supply amid fluctuation of international oil prices, a local newspaper reported on Thursday.
CNPC, parent of Asia’s largest oil and gas producer PetroChina and Sinopec Group, parent of top Asian refiner Sinopec Corp will build some 3.0 million tonnes of new oil storage facilities in coastal areas, the China Reform News reported.
The new storage, mainly to store crude oil, will be built near existing commercial crude storage facilities in major cities of Shanghai and Tianjin and coastal provinces of Zhejiang, Fujian and Hebei, it added.
The two oil majors have been the leading builders of oil storage facilities to both service their expanding refining system and establish commercial space under Beijing’s call to boost supply security.
Beijing has started enlisting the private sector to be part of the national reserve system.
According to the CNPC forecast, China’s new refining capacity due online this year will be 24.5 million tonnes per year, or 490,000 bpd.
China, the world’s second-largest oil consumer, began building its strategic petroleum reserve in 2005. The first phase was finally completed in early 2009, with a total capacity of 102 million barrels.
The second phase of the project is scheduled to be completed by early 2012 and total reserve capacity will reach 500 million barrels when the third phase is finally completed in 2020.
China’s reliance on foreign crude oil, now at about 56 percent, will keep on growing as domestic oil production is unlikely to surpass 200 million tonnes, state media have said.
