China takes aim at energy crisis with world’s biggest crude-oil processor
- Huge processing vessel undocks as a chorus of calls and suggestions flag energy security pitfalls and call for Beijing to take action
- Russia’s invasion of Ukraine has pushed up global energy prices and raised fears in China about securing enough oil and gas
China undocked the world’s largest crude-oil-processing vessel by tonnage and storage at the weekend, as energy security has taking centre stage in policymakers’ risk-preventing playbook.
The floating production storage and offloading (FPSO) vessel, designed by Qidong Cosco Marine Engineering Co in east China’s Jiangsu province, will be capable of processing 180,000 barrels of oil per day and handling 12 million cubic metres of gas, according to state-backed Yangtze Evening Post.
The FPSO came at a time when Beijing is trying to shore up its energy supplies, especially with Russia’s invasion of Ukraine having pushed up global energy prices and brought huge uncertainties. FPSOs are used by the offshore oil and gas industry to produce and process hydrocarbons, and for oil storage.
China is the world’s largest crude-oil buyer. It imported 508 million metric tonnes of crude oil, mainly through Saudi Arabia and Russia, last year, which represents more than 70 per cent of its crude requirements.
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The new vessel is 335.31 metres long, 60 metres wide, and 33.51 metres deep. It has a maximum storage capacity of 1.4 million barrels of crude oil, according to the report.
The National Development and Reform Commission (NDRC), which oversees the country’s strategic oil reserve, on Saturday called for greater attention to energy-resource security and for deeper promotion of the energy revolution.
The top economic planner listed energy security as one of the major risks, along with food security, supply chains and industry chain security, plus data protection.
“[We] should push forward the energy revolution, accelerate the planning and construction of the new energy system, and strengthen the construction of the energy production, supply, storage and marketing system,” according to an article by its chairman, Zheng Shanjie.
Zheng also called for greater exploration of China’s resources, strengthening the country’s energy reserve system, and improving the layout of reserves and the network of facilities.
The world’s second-largest economy is seeing its energy security tested amid higher external dependence on oil and gas, pushing Beijing to take steps to ensure China has sufficient energy to meet its needs.
Over the past few years, China has imported more than 70 per cent of its crude oil and more than 40 per cent of its natural gas, according to Post calculations based on data from China Customs and the National Bureau of Statistics.
Russia was China’s second-largest source of oil last year, accounting for 16.9 per cent of total imports, up 1.4 percentage points from 2021, according to a review of customs data.
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During the “China Energy Security Summit Dialogue” in Chengdu on June 29, Sichuan University and the Chengdu municipal government released a “White Paper on China’s Energy Security 2023”.
The paper said China’s energy security is facing major challenges, including low per capita, unbalanced regional distribution, weak enterprise power, high oil and gas reliance and low international bargaining power.
China’s oil and gas resources per capita are only about 1/15th of the world average, and its coal and hydro resources per capita possession is equivalent to 50 per cent of the world average, according to the paper.
The paper also called on the government to accelerate the replacement of traditional oil and gas energy with new energy sources and to speed up breakthroughs in key technologies for oil and gas extraction and storage.
