China NDRC official confirms strategic oil fill
October 16, 2006Reuters News
BEIJING, Oct 17 (Reuters) - A senior official from China's top economic planner on Tuesday confirmed that Beijing had begun pumping crude into newly built strategic oil reserve tanks, but did not say how much had been filled or when the stockbuild would be completed.
"We are currently in the process (of filling), it is very hard to say how much has already gone in," Jiang Weixin, vice chairman of the National Development and Reform Commission (NDRC), told reporters.
He declined to go into detail about the source of the supplies or the timing for filling the tanks in Zhenhai.
Official media and port sources said last week that China had pumped Russian crude into its first emergency reserve facility in August, the first hard evidence that the stockbuild was underway. As much as 3 million barrels of seaborne crude has been delivered, sources said, filling about a tenth of its capacity.
The strategic reserves are a cornerstone of China's plan to address its growing vulnerability to supply disruptions and volatile world markets. A net exporter less than 15 years ago, China now imports nearly half its crude oil needs.
The country's first facility at Zhenhai was declared fully ready for use late last month, although the first set of tanks were built a year ago, leaving traders guessing as to when the world's second-biggest oil consumer would begin pouring in oil.
A second batch of tanks at China's second reserve site in Zhejiang province should be ready by the end of the year, a newspaper reported on Monday.
More tanks are also planned for Qingdao in Shandong province and Dalian in Liaoning province as part of a first phase of a reserve plan, due for completion in 2008, that will have a total capacity of 16.2 million cubic metres (102 million barrels) -- or about a month of imports at current rates.
Oil traders fear China will have to increase imports by as much as 100,000 barrels per day (bpd) in order to fill the reserves. That would be a relatively small volume in global terms but represent a 3.4 percent rise from current imports.