OREANDA-NEWS. March 17, 2011. China will start work on building strategic oil reserve tanks at the north-eastern port of Tianjin by May, China Daily newspaper reported.

Work will be completed before the end of China's 2011-2015 five-year economic plan, and filling this reserve will start when the oil price is "appropriate", Tianjin city official He Shushan was quoted as saying.

China's efforts to build up oil stocks are closely watched by energy market analysts, as its demand for oil is a key driver of global prices and huge amounts of crude are needed for the project. China imports more than half the oil it uses.

The reserve site in Tianjin is among eight stockpiling bases being prepared in the second phase of China's strategic petroleum reserve project.

These eight sites will have 26.8 million cubic meters of capacity, able to store the equivalent of 169 million barrels of crude oil.

The western countries' energy watchdog, the International Energy Agency, has repeatedly criticized Beijing for not publishing national oil stock volume figures, which are needed to calculate global oil demand.

Sites for other second-phase bases include Zhanjiang and Huizhou in Guangdong province, Lanzhou in Gansu province, and Jintan and Jinzhou in Liaoning province.

China's National Energy Administration has said it plans to accelerate efforts to build the second phase of the SPR to ensure energy security.

Under the first phase, storage tanks were built at four sites: Zhoushan and Zhenhai in the eastern province of Zhejiang, Dalian in the northeastern province of Liaoning and Huangdao in Shandong province. These have been filled to their capacity of 178 million barrels of crude oil.
China's petroleum reserve capacity was enough for 39 days of consumption by the end of 2010, with this comprising the SPR oil and a further 168 million barrels of commercial reserve capacity, state energy giant China National Petroleum Corp. said in January.