(EnergyAsia, February 27, Friday) — China will soon begin building eight new strategic oil stockpile sites around the country as it races to complete filling up 16 million cubic metres or 100 million barrels of capacity at all four of its first phase sites.
China’s rush to expand its oil stockpiles has helped world oil prices recover to more than $40 per barrel from a five-year low of less than $35 per barrel in recent weeks.
The government has not officially announced the second phase of its stockpiling programme, but leaks by industry insiders suggest that it is aiming to build up a total capacity of as much as 26.8 million cubic metres or 170 million barrels. Some of the new sites include Caofeidian in Hebei province, Tianjin city (Tianjin), Wanzhou in Chongqing municipality (Sichuan) and Jinzhou (Liaoning).
The first phase sites in the port cities of Dalian (Liaoning province), Ningbo (Zhejiang), Qingdao (Shandong) and Zhoushan (Shandong) have a total capacity of 16 million cubic meters, or around 100 million barrels. The government started filling up the sites late last year, about two years after it began constructing the terminals.
Officials are also encouraging local oil companies to build up oil stockpiles.
According to state-owned CNPC, China plans to stockpile nearly 45 million cubic metres of crude oil by 2011.
US crude oil futures have plunged sharply since hitting a peak of more than $147 per barrel last July.
In recent months, China, the world’s second-biggest oil consumer, has taken advantage of low oil prices to accelerate its stockbuilding programme and lock up long-term supplies with Russia, Venezuela and African suppliers.