PetroChina to start stock build-up
PetroChina will soon start building a stockpile of commercial crude oil following the government's call for both central authorities and companies to help the nation absorb external supply shocks.
The mainland's largest state-controlled oil producer next month will start building storage facilities worth 6.5 billion yuan in Xinjiang Autonomous Region that are capable of stocking 8.1 million cubic metres of oil, the Shanghai Securities News quoted an unidentified company source as saying.
Phase One of the facilities, about 300km from the Xinjiang capital Urumqi, will have a capacity of one million cubic metres and be completed next year at a cost of 856 million yuan, the report said.
A company spokesman confirmed the company was preparing to build a commercial stockpile to augment its normal 15 to 17 days of operational inventory. He declined to give details.
In a document issued in April last year, the Ministry of Land and Resources said Beijing would push a phased development of reserves of crude oil and metal resources.
It said reserve-building would be funded by the government and companies and include product reserves and proved mining reserves.
By 2010, the mainland plans to stockpile oil reserves equivalent to 30 days of imports, increasing eventually to 90 days, in line with the standards required by the International Energy Agency.
Storage facilities in Zhenhai and Aoshan in Zhejiang province have been completed. Those in Huangdao, Shandong, and Dalian, Liaoning will follow next year. They will have a combined storage capacity of 103 million barrels, equivalent to 24 days of imports.
As mainland oil firms are state-controlled, the government and corporate reserves have been bundled in one location.
China Petrochemical Corp has taken a temporary lease on the Zhenhai facility while the central government works out regulations covering management of the national reserve.
