China starts building huge Tianjin oil storage-paper

Published: 15 Feb 2009 23:10:32 PST

BEIJING, Feb 16 - China has begun construction on a massive oil storage base in the coastal city of Tianjin in northern China, a newspaper run by a government think-tank reported.

The base would include storage tanks for state strategic oil reserves that could hold up to 5 million cubic metres, or 31.5 million barrels of oil, and tank farms of a similar size for commercial stockpiling, the China Business Weekly said in its weekend edition.

Part of the project is expected to be completed within the year, the report said.

The newspaper, run by the Chinese Academy of Social Sciences, a government think tank, said state oil firm Sinopec and CNPC have sent workers and designers to the project in the port city after the Lunar New Year holidays, which ended in early February.

The report did not provide more details including the investment for the project.

China's first strategic oil base in Zhenhai in Zhejiang province can hold 5.2 million cubic metres, or 33 million barrels of oil, and its first four strategic oil bases, making up the first phase of state stockpiling, have total capacity of 16.2 million cubic metres.

Beijing has completed plans for the second phase of state storage facilities that could hold up to 26.8 million cubic metres of oil, or 170 million barrels, but has not disclosed where the facilities are or whether construction has begun.

Caofeidian in Hebei province, neighbouring Tianjin, and Wanzhou in southwestern Chongqing municipality were reported as being among the sites for the second phase of strategic oil storage reserve bases. [ID:nPEK296198]

Official media said China will begin building eight strategic oil stockpiling facilities, including at Jinzhou in northeastern Liaoning province, this year after the four bases in the first phase were operational last year. [ID:nL377441]

China has said it would take advantage of the falling crude prices to boost oil and gas imports and push forward its strategic stockpiling plans, and encourage its oil firms to use spare capacity to build commercial oil reserves.