China starts building next phase of oil reserve

BEIJING (Reuters) – China has started building 5.4 million cubic metres of oil tanks at Dushanzi in Xinjiang in its far west as part of the second phase of strategic oil reserves, official Xinhua News agency reported on Thursday.

The project will cost 2.65 billion yuan ($390 million) and will start with a first phase of 3 million cubic metres, which is due to be finished by July 2011, Xinhua said, citing officials speaking at the startup ceremony.

China finished filling the first phase of its strategic oil reserves at the end of last year and has said it plans to stock up on oil when prices are relatively low.

It has completed plans for a second phase of strategic crude oil reserves with capacity of 26.8 million cubic metres or 170 million barrels, after filling the first four storage tanks totalling 16.2 million cubic metres or 102 million barrels.

Citing a researcher with the National Development & Reform Commission, Caijing magazine said on Thursday that China will complete building eight bases under the second-phase plan within three to four years, starting this year.

Reuters