China to have 10-mil bbl of crude storage tanks ready by end-Aug
Hong Kong (Platts)--7Jul2005
China is set to complete construction on a batch of 16 storage tanks under the first phase of its strategic crude stockpiling program in eastern coastal Zhejiang province at the end of August, and the government could start buying crude for the reserve as early as the fourth quarter of this year. Each of the 52 tanks to be eventually built at the Zhenhai storage base in Zhejiang province will have a capacity of 100,000 cu m, or 629,000 bbl, a source with Sinopec Zhenhai Refining and Chemical said Wednesday. The 16 tanks will thus make available space to store some 10-mil bbl of crude. The entire Zhenhai development, providing some 32.7-mil bbl storage space, will be ready only by the end of 2006, the source said. China processed some some 5.48-mil b/d of crude in 2004, up 13.55% on the year. ZRCC, which operates China's largest 19-mil mt/yr (380,000 b/d) refinery in Zhenhai, has been commissioned by the central government to build the 5.2-mil cu m Zhenhai strategic reserves base. The entire Zhenhai base development is estimated to cost about Yuan 3.75-bil ($454-mil). Besides Zhenhai, the government has also picked Aoshan in Zhejiang, Huangdao in eastern Shandong province and Dalian in northern Liaoning province as sites for the first phase of its strategic reserves program. The Aoshan base will have 5-mil cu m of storage space and investment is pegged at more than Yuan 2.9-bil. The Dalian and Huangdao bases will each have 3-mil cu m of storage capacity under the first phase development. All four bases are expected to cost a total of about Yuan 10-bil to build. Development of the Zhenhai base is the most advanced stage among the four, and the central government is eyeing on an end-2008 completion schedule for all four, the official Xinhua news agency reported earlier this week. In the meantime, the impending completion of the first 16 tanks in Zhenhai has set the market abuzz on when China would start buying for the stockpiling, even as some contradictory messages have emerged from Beijing. Xinhua Monday said the country would start filling up the Zhenhai tanks in the fourth quarter of 2005 with indigenous crude production, citing unidentified officials with the Zhenhai reserves administration office. The foreign news agency quoted Zhang Guobao, vice-minister of China's National Development and Reform Commission, as saying last week in New Orleans, the United States, that China would not import crude for its strategic stockpiling because of cost concerns, and would use indigenous crude for the purpose. He also reportedly said the Chinese government would consider allowing oil companies pay their taxes in the form of physical oil delivery into the national reserve stockpile program. However, another NDRC official, the director general of the energy bureau Xu Dingming, was quoted last week by the foreign news services as telling a business conference in Beijing that high oil prices may cause China to delay filling its strategic reserves indefinitely. For more information about China, take a trial to Platts Oilgram News at http://oilgramnews.platts.com
Copyright © 2005 - Platts
Please visit: www.platts.com
Their coverage of energy matters is extensive!!.