A strategic oil reserve will be developed in Wanzhou District in Southwest China's Chongqing Municipality to further secure the country's oil supply.
The reserve would be part of the second phase of the national strategic oil reserve plan.
Sources from the National Development and Reform Commission (NDRC), the nation's top economic planning body, said the oil reserves would have a total capacity of 28 million tons, in the second phase.
The Sichuan Reserves Administration Bureau and the local government of Wanzhou District signed an agreement on November 23 for the construction of the reserve.
Located near the center of Three Gorges Reservoir area, the Wanzhou is geographically significant.
Preparation work for the reserve is going smoothly, according to Liu Shuxin, director of the Sichuan Reserves Administration Bureau.
"In order to ensure all-round energy security, the central government will not only build strategic oil reserves in the eastern part of the country," Han Xuegong, a veteran oil expert was quoted as saying by Shanghai Securities News yesterday.
Analysts said the expansion of the strategic oil reserves showed China's growing concern for its energy security.
Statistics showed that China's crude oil imports in the first 10 months rose 13.8 percent from a year ago to 136.68 million tons.
China plans to have 12 million tons of strategic oil reserves by the end of 2010, according to sources with the NDRC. Current strategic oil reserves are recorded at between 2 and 3 million tons.
NDRC Vice-Minister Chen Deming earlier said that oil reserves in 2010 would equal one month of China's net imports of crude oil, and that number will be raised further to an equivalent of three months of imports by 2020.
The national strategic oil reserve plan was launched in 2003. China planned to construct four oil reserves along the coastal areas in the first phase of the plan.
Under the plan, two reserves are located in Ningbo City's Zhenhai District and Zhoushan City, both in Zhejiang Province in East China. The other two are in Qingdao and Dalian.
Source: China Daily