China to establish four coastal strategic oil reserves

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Last updated at: (Beijing Time) Thursday, December 04, 2003

China to establish four coastal strategic oil reserves

A high-level personage with the National Development and Reform Commission noted recently that China will build four coastal strategic oil reserves including Dayawan in Guangdong Province.

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A high-level personage with the National Development and Reform Commission noted recently that China will build four coastal strategic oil reserves including Dayawan in Guangdong Province. To this, it is learnt from the Guangdong provincial Development and Reform Commission that the first batch of two oil bases have been determined by the National Development and Reform Commission, but the proposed locations, Dayawan and Zhanjiang in Guangdong Province have not yet been approved. The personage with the Guangdong provincial Development and Reform Commission said that they will continue to make efforts in the hope that they can be included into the second batch and will get down to the establishment upon approval.

The first batch determined: Huangdao in Shandong Province and Dalian

Jiang Weixin, deputy director of the National Development and Reform Commission pointed out at the International Seminar on Energy Strategy and Reform held by the Development Research Center of the State Council (DRC) that in order to deal with emergency, China will gradually establish and improve oil reserve system. For this, a national office of oil reserve has been established in the National Development and Reform Commission dedicated to affairs on the oil reserve of the country.

Another high-level personage with the National Development and Reform Commission said that facing China's growing oil consumption, the National Development and Reform Commission, the National Office of Oil Reserve are looking for strategic oil reserves, that is to allocate six billion yuan on oil reserves in four domestic ports.

Sources with the Guangdong provincial Development and Reform Commission confirmed that the National Development and Reform Commission has determined two oil reserves: Huangdao in Shandong Province and Dalian in north China's Liaoning Province. Dayawan and Zhanjiang in Guangdong Province are yet to be approved.

Over five million tons in scale for the two sites in Guangdong

Relevant personage with the Development and Reform Commission of Guangdong Province said that previously Guangdong Province has handed two candidates for oil reserves, one is Dayawan and the othe Zhanjiang. The selection of Dayawan has been confirmed, but uncertainties lie in Zhanjiang. To be specific, the site will be in western part of Guangdong Province therefore chances are the same for both Zhanjiang and Maoming.

The personage added that both the two oil reserves in Guangdong Province are suitable for a scale of over five million tons. First, their conditions in terms of port and geology fit the requirements. Second, geographically, they are close to large oil refineries and are ideal locations in terms of energy delivery, market linking and emergency reaction. Dayawan is close to Guangdong Petrochemical while there are Maoming Petrochemical Corporation and Dongxing Petroleum Enterprise Co. in the western part of Guangdong Province. The two candidate sites are striving for a place in the second batch of oil reserves and construction will begin upon approval.

According to the prediction made by experts concerned, the other two oil reserves are likely to be set in Guangdong Province.

China's recoverable oil totals 13-16 billion tons

According to departments concerned, the statistics presently used by China show that the volume of the country's oil resources is 106.9 billion tons and natural gas 53 trillion cubic meters. Relevant experts have been correcting the above figures with various coefficients and finally figured out that China's recoverable oil reserves stand at 13-16 billion tons and natural gas at 10-15 trillion cubic meters.

China made two nationwide assessments of oil and natural gas resources in the 1980s and the 1990s, which, however, did not calculate the exploitable reserves. Along with the oil/gas supply- demand situation becoming increasingly grim, the Chinese government started a new round of estimate of nationwide oil/gas resources to get a clear picture of the nation's oil and natural gas reserves.

At a "Working Conference on a New Round Assessment of the Nation's Oil/Gas Resources" held recently, Minister of Land and Resources Sun Wensheng pointed out that this assessment aims to establish a national oil and gas assessment system, to grasp the situation of oil and natural gas reserves, to forecast the development trends of these reserves, thereby providing a scientific basis for the country in its formulation of major strategies and economic development programs.

Since China became a net importer of oil in 1993, its dependence on imported oil reached 33 percent of its total oil consumption in 2002 and this figure is expected to hit 50 percent-60 percent in 2020.

By PD Online staff member Gao Lanrong

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