CHINA plans to increase its oil stockpile to 1,200 tons by 2010, which is about three times the current level, a senior official with the nation's top economic planning body has said at a forum in the United States.
But the oil stockpile increase will only be gradually reached during the next few years as global oil prices remain high and this is not an ideal time for purchases, Chen Deming, deputy director of the National Development and Reform Commission said at the US-China Oil and Gas Industry Forum in San Francisco on Monday, Shanghai Securities reported today.
Crude oil futures prices traded above US$80 a barrel for the first time yesterday on shrinking US inventories and storm concerns.
China's oil reserves, which now stand at 200 tons to 300 tons, are expected to cover the equivalent of 30 days of imports by 2010 while they will be about the equivalent of three months of imports by 2020, Chen noted.
The International Energy Agency, an adviser to 26 oil-consuming nations, recommends its member countries maintain a stockpile equal to 90 days of net oil imports.
China currently is not an IEA member.
China is building a store of oil to shield the world's fastest-growing major economy from supply disruptions and price volatility.
In 2003, the country started building the first batches of four oil reserve tanks in Ningbo City's Zhenhai District and Zhoushan City, both in Zhejiang Province. Another two are being built in Huangdao District in Qingdao City, Shandong Province and Dalian City of northeastern Liaoning Province.
The oil tank in Zhenhai went into use last year while the one in Zhoushan began storing in the first half of this year, the report said.
Construction of the Huangdao oil reserve tank, a facility with a designed storage capacity of three million cubic meters, will be kicked off by the end of this year and is expected to be put into use by 2008, said Wang Jianping, deputy director of the Development and Reform Commission of Qingdao in a recent interview, the report said.
But he declined to reveal when the tank will start receiving oil, which was a decision, he said, made by the central government, the report added.
Chen also stated at the US forum that China hopes the United States can come up with an explicit policy to clear the question of whether Chinese companies can buy oil and gas assets in the US.
"Given the scale of the trade surplus between China and the US, oil and gas assets will be a proper option for Chinese firms to invest in, which will help narrow the gasping trade gap," Chen said.
However, he added that he still has no idea whether American corporations are interested in purchase offers from their Chinese counterparts.
China National Offshore Oil Corp, the third biggest oil company in China, tried in 2005 to buy US oil company Unocal Corp to get access to its Asian gas reserves but dropped the bid after opposition from US politicians. Later that year, Chevron Corp bought Unocal.