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Work on Tianjin crude reserve base starts
2010-May-13 07:58:51

New Sinopec facility expected to bolster nation's energy security

BEIJING - Oil refiner Sinopec has started work on a commercial crude reserve base with a capacity of 3.2 million cubic meters in Tianjin, in line with the nation's plan to build more reserves for energy security.

The reserve is designed to have 32 oil tanks each with capacity of 100,000 cu m. A 22-km pipeline will also be built, with an annual capacity of 20 million tons, Sinopec said on its website on Wednesday. Work on the project started from Tuesday and Sinopec expects to complete the reserve in two years.

The crude reserve is 7 km away from Sinopec's Tianjin petrochemical project, which can refine 10 million tons of crude and produce 1 million tons of ethylene annually. Sinopec started operating the petrochemical complex on Tuesday.

The project will help stabilize supply of oil products in northern China, said Sinopec President Wang Tianpu.

Construction of more oil reserves will help ensure the country's energy security, said analysts. "Such projects will reduce the impact of fluctuating global oil prices on the domestic market," said Han Xiaoping, chief information officer of domestic energy portal China5e.com.

"More reserves will also help reduce supply risks when there is an interruption," he said.

Chinese oil companies have quickened their pace in building oil reserves. Sinopec started building another commercial oil reserve in Guangdong in March, which is designed to have 15 oil tanks each with capacity of 125,000 cu m and is expected to come on stream in the second half of 2011.

In April, China National Petroleum Corp (CNPC) started work on an oil reserve base in Tianjin Binhai New Area. The base, spread over 250,000 square meters, is expected to cost about 980 million yuan and would be the company's fourth crude oil reserve base, after Shanshan in the Xinjiang Uygur autonomous region, Lanzhou in Gansu province and Tieling in Liaoning province.

Analysts have long suggested China build a comprehensive system of oil reserves to ensure energy safety. "In my opinion China's oil reserve system should be made up of two parts - the government reserve and enterprise storage," said Han with China5e.com.

China has now completed construction of the first four State strategic oil reserve bases in Zhenhai and Zhoushan in Zhejiang, Huangdao in Shandong province, and Dalian in Liaoning province.

The country plans to build eight more national oil reserve bases as the second batch of its reserve bases. Under a three-year (2009-11) blueprint outlined by the National Energy Administration (NEA), China will collect and store 44.6 million cu m of crude oil by 2011.

China Daily

(China Daily 05/13/2010 page13)

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