The central government is in receipt of an operational draft for a new national petroleum reserve center, the China Securities Journal reported yesterday.
Operations will follow those of the China Grain Reserves Corporation and the China Cotton Reserves Corporation, the National Development and Reform Commission (NDRC) told the newspaper.
The grain and cotton reserves corporations, which have both been operating for more than 10 years, are entrusted by the State Council to manage national reserves of these products while retaining responsibility for their own profits and losses.
When the national petroleum reserve center is operational it'll take over the established national strategic oil reserve bases and manage oil assets worth tens of billions of US dollars, the newspaper said.
China started to build national oil reserve bases in 2004. The first four are in Zhenhai and Daishan of southeast China's Zhejiang Province, Huangdao in east China's Shandong Province and Dalian in the northeastern Liaoning Province. The bases are included in the government's social and economic development plan for the period 2006-10.
Ma Kai, NDRC minister and director of the new National Energy Office, said the first four petroleum bases would be completed this year and have a total storage capacity of between 10 and 12 million tons.
China produced a three-phase blueprint for building up national petroleum reserves to cope with global oil price fluctuations. The country is expected to have oil reserves of 12 million tons in the first phase and 28 million tons in the second and third phases respectively.
The country is now importing around 100 million tons of oil a year and a gradual growth in oil stored would not cause a major fluctuation to the international oil price, according to the newspaper.
Compared with its huge imports China's strategic oil reserves are considered small. The petroleum reserved by China National Petroleum Corporation (CNPC) and China Petroleum & Chemical Corporation (Sinopec), two of the country's oil majors, is equal to 21 days of China's crude oil imports.
Figures show that the US' petroleum strategic reserve is equivalent to 158 days of crude oil imports, Japan 161 and Germany 117.
(Xinhua News Agency July 21, 2006)