Hong Kong (Platts)--30May2007

China has officially launched operation of the first phase of the
country's second strategic petroleum reserve terminal on the Aoshan island in
eastern Zhejiang province on May 23, local China Petrochemical News newspaper
reported Wednesday.
     The newspaper, published by Chinese state-owned oil giant Sinopec Corp.
Group, said the first phase development of the Aoshan base included 24 tanks
with 100,000 cubic meters each and other attached facilities. 
     An inauguration ceremony was held last Wednesday to mark the Aoshan
depot's startup, the newspaper said. An engineering subsidiary of Sinopec was
responsible for the construction of the Aoshan depot, the newspaper said,
adding the project was completed five months ahead of schedule. 
     The terminal also received its first batch of 238,000 mt crude supplies
during the May 23 ceremony. 
     China's first operating strategic oil reserve base, the
5.2-million-cubic-meter (32.74-million-barrel) Zhenhai terminal also in
Zhejiang province, started pumping in crude in mid-2006.
     In the first phase of its national crude oil stockpiling effort, China is
building two other strategic oil terminals at Huangdao in eastern Shandong
province and Dalian, Liaoning province, in the northeast of the country.
     When complete, the four terminals will have a total storage capacity of
16.2 million cu m (102 million barrels), equivalent to around 14 days of total
Chinese consumption and about 28 days of imports.
     Customs data released earlier this month showed that China's monthly
crude imports rose to a fresh record high in April, at 14.82 million mt (3.63
million b/d), breaking the previous record of 13.86 million mt set in March.
     The rise in crude imports suggested that the Chinese government might be
actively stocking up barrels for its strategic crude stockpiling program.
     The Chinese government is also considering the sites for the second-phase
of its strategic oil stockpiling program.