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China's Zhenhai oil reserve already three quarters full: report
Platts
Singapore
Petroleumworld.com 01 30 06
The Chinese government had filled the first storage site in its Strategic
Petroleum Reserve by more than three quarters as of January 17, a national
newspaper reported last week.
According to a report in "China Business," the Beijing-based national
business newspaper, the 5.2 million cubic meters Zhenhai reserve already held
more than 25 million barrels, or 4 million cu m, by that date. A little more
than 12 million of those barrels arrived in Zhenhai in December, said the
report, which quoted an unidentified source at the storage terminal.
The report suggests that China is well ahead of its broad target of
filling Zhenhai, which is in eastern Zhejiang province, by the end of this
year.
The source at Zhenhai was quoted as saying a large number of the tanks
have been leased to state-owned oil refining giant, Sinopec. Over half of the
crude in tank is under title to Sinopec, and the government may take control
of the reserve at any time to manage an emergency, as part of the SPR
arrangements, said the report.
China is planning three other strategic oil terminals -- at Huangdao in
Shandong province, Aoshan in Zhejiang, and Dalian in northeastern Liaoning
province -- as part of the first phase of the SPR. When complete, the four
terminals will have a total storage capacity of 16.2 million cu m (102 million
barrels), equivalent to around 14 days of total consumption, at current demand
rates.
Last week's report in China Business said the China Petroleum Pipeline
Bureau, which is responsible for building some of the storage tanks in
Zhoushan, had finished the a first 1.2 million cubic meter phase at the 5
million cubic meter Aoshan reserve.
Elsewhere in China, local media reports said Friday that the Chinese
government was considering several locations in southern China, including
Shenzhen and Xiaohu Island near Guangzhou, as possible parts of the second
phase of the SPR.
In total, China is preparing three phases for the national reserve
project. The 10 million mt first phase SPR is expected to be complemented by a
28 million mt second phase, and eventually a third phase of the same size.
--Staff, Dave Ernsberger (dave_ernsberger@platts.com)
Platts 29 01 07
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