TAIPEI—China has filled its first national oil reserve, the Zhenhai National Oil Reserve Base. Three other oil reserve bases in Zhoushan, Dalian and Qingdao will be filled over the next two years. Even still, the magnitude of China's strategic petroleum reserve falls far short of the stocks required.
According to Hong Kong China News Agency, staff at China's National Oil Reserve Center previously revealed that China only has a 37-day supply of crude oil reserves, including the reserve at the four bases and the three state-run petroleum companies. This number falls far short of the 90 days reserve obligation of International Energy Agency member countries.
Located in Zhenhai City, Zhejiang Province, the Zhenhai oil base has a storage capacity of 5.2 million cubic meters. Xu Dingming, former director of the Energy Bureau of the National Development and Reform Commission, described the Zhenhai National Oil Reserve Base as “the first step of a long march.” China's next step for its petroleum reserve remains undisclosed.
According to CAN, China plans to complete the construction and water-testing of the four bases in 2008, and fully fill the bases with crude oil in 2009.
A construction company involved in the building of the Zhoushan oil reserve base revealed that so far 70 percent of the cavern tanks in the base have been completed and about half of the tanks water-tested. Presently six caverns in the Zhoushan base are under construction. The construction of the base will be completed in the early half of 2008.
By end of 2008 the other two bases will also be ready. Some of the water-tested caverns have begun to store oil on a small scale.
According to China's National Oil Reserve Center, the locations of future oil reserve bases remain confidential. However, the center revealed that they have completed the surveys and are now making concrete plans.
China's first oil reserve bases are all located in coastal areas. It's estimated that the second group of bases will extend to inland areas to maintain balance. Wanzhou area of Chongqing Municipality in the southwest and Lanzhou City of Gansu Province in the northwest are potential choices for future base locations.
Upon completion of the second group of oil reserve bases, China will have established 20.8 million tons of oil reserve. But this number still falls far short of the standard capacity recommended by IEA.