The first phase of the Shanshan storage tanks, 300 km east of Urumqi, the capital of Xinjiang region, cost some 856 million yuan ($125 million) and could hold 1 million cubic metres, or 6.3 million barrels, of crude oil, the report said.
The project was constructed by Xinjiang Oilfield Corporation, a unit of PetroChina (601857.SS)(PTR.N).
Shanshan oil storage, China’s largest tank farm, estimated to cost some 6.5 billion yuan ($949 million), would be able to store up to 8 million cubic metres of oil or 50.4 million barrels, once all the planned reserve tanks are ready for use, the report said.
It was not clear whether the facility would be used to store commercial or strategic reserves. The company did not say who would supply the oil, although PetroChina’s parent, state oil firm CNPC, owns a stake in Kazakh producer PetroKazakhstan.
China began filling the third of its four state-owned strategic crude oil reserve bases in November, taking advantage of the diving crude price to build up an emergency supply buffer for the future, industry sources told Reuters in December.
The four existing bases make up the first phase of China’s strategic oil storage plan. Beijing has said it has completed the planning of the second phase but has not disclosed details such as where the tanks would be or whether construction has begun.
Shanshan and Lanzhou, the capital of Gansu province, were expected to be included as the locations for the second phase of strategic oil bases, the Beijing-backed Wen Wei Po newspaper has reported.