April 24, 2024

China accelerates the implementation of its oil reserve strategy

The first phase of the oil storage base is about to be completed. Xinjiang Shanshan Crude Oil Commercial Storage Bank broke ground and its foreign dependence on petroleum is close to 50%! The international oil price exceeded US$104 per barrel! As the signals of oil tension continue to spread, China is significantly strengthening its efforts in oil security. The establishment of strategic oil reserves is one of the important aspects. China National Petroleum Corporation announced yesterday that the construction of a commercial reservoir project for Xinjiang Shanshan Crude Oil with a total storage capacity of 1 million cubic meters has commenced. Just one day before the news came out, the Liaoning Provincial Government disclosed that Dalian Strategic Petroleum Reserve Base has also been completed by two-thirds.
As one of the first four strategic petroleum reserve bases in China, Dalian Base will mark the completion of the first phase of China's strategic oil storage base once completed.
According to the information revealed in the Liaoning Provincial Government's announcement, a total of 14 oil storage facilities have been completed in the Dalian reserve base, and 8 oil storage facilities are under construction. The announcement also stated that the total investment in the construction of the reserve base is 2.51 billion yuan, and it can reserve 3 million cubic meters, or nearly 19 million barrels of oil.
Prior to this, China began to inject oil to Zhejiang Zhenhai Strategic Petroleum Reserve Base from October 2006. In addition to the Zhenhai base, Shandong Huangdao and the Zhejiang Zhoushan oil reserve base have also been completed, but due to the continuing high oil prices, the oil injection work has been delayed.
In addition to the four strategic petroleum reserve bases in the above-mentioned coastal areas, the site selection work for the second phase of the oil reserve base has also been conducted in a low-key manner. However, the Development and Reform Commission has not officially announced the results of the site selection. During this period, Lanzhou, Gansu, Shanshan, Xinjiang, Tangshan, Hebei, etc. all reported the proposed crude oil reserve, while Wanzhou, Chongqing, allegedly built the largest refined oil reserve in China. These may be the site of the site for the second phase of the oil storage base.
It is worth noting that PetroChina Group yesterday announced the official start of the construction of the Xinjiang Koshan Crude Oil Commercial Repository project with a high total storage capacity of 1 million cubic meters, which confirmed the rumor. However, CNPC still categorizes the reserve as a "commercial reserve," which shows the difference from the strategic oil reserve.
The reporter learned that the commercial reservoir of Shanshan crude oil comes from the western crude oil pipeline. Crude oil from Xinjiang oilfield, Tuha oilfield, Tarim oilfield, and Kazakhstan imported crude oil will be transported to the reserve through the western crude oil pipeline. One of the crude oil goes to Lanzhou via the western crude oil pipeline, and the second one is that under special circumstances, it can use the loading and unloading facilities at the last station of the Kuqa crude oil pipeline.
CNPC said that the construction of the Shanshan Crude Oil Commodity Repository is conducive to improving commercial storage capacity, is conducive to the rational allocation of resources and structural adjustment, is conducive to the deployment of supply and demand relations between oil sources and the market, and is conducive to the safety, stability and efficiency of oil products. Transport is a major strategic measure to safeguard the safety of crude oil reserves of countries and enterprises, and is of great significance to the promotion of regional economic development and social stability.
“Whether it is a commercial or national strategic reserve, it is a way to improve national oil security,” said Deng Yusong, director of the General Office of the Institute of Market Economy at the State Council’s Development Research Center. China’s development in the national oil reserve is accompanied by a commercial oil reserve. It will be gradually established. This is a gradual process.
Pan Jiahua, chairman of the Petroleum Storage and Transportation Professional Committee of the China Petroleum Institute, told the reporter that the country should take the lead in oil reserves and assume strategic reserves to resolve the risks of oil security and economic security; at the same time, the state must also allow companies to buy shares. Other ways to participate in a part of commercial reserves, in order to spread the financial pressure of strategic reserves.
As an expert in the field of oil reserves, Pan Jiahua, who was over 70%, was the first person in the industry to advocate the establishment of a national oil strategic reserve base, and was also the final examiner of the National Petroleum Reserve Bank Construction Standards Development Group.

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