Private firms get the green light

09:11, June 01, 2010      

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China's national strategic oil reserve project will open to private enterprises for the first time, with six domestic firms approved for involvement in the project, the China Business Times reported Monday.

The six designated companies reportedly include Zhoushan Run Petrochemical in East China's Zhejiang Province and Yantai Port Group located in East China's Shandong Province. Neither of the companies confirmed the news Monday.

In China, private oil businesses have been blocked from entering the national strategic oil reserves project. The construction of oil and gas storage facilities is tightly controlled by State-owned enterprises, such as CNPC, Sinopec and CNOOC.

China started discussions about building national strategic oil reserves in 2003 when the nation first became a net crude oil importer.

The central government plans to spend 100 billion yuan ($14.64 billion) on the strategic oil reserve project, which will be implemented in three phases over the next 15 years. Costal cities including Zhenhai, Zhoushan, Huangdao and Dalian have been chosen as locations for oil reserves in the first phase, which is expected to have a storage capacity of 12 million tons of crude oil.

Inland cities such as Lanzhou in Northwest China's Gansu Province and Dushanzi in the Xinjiang Uyghur Autonomous Region will be part of the second phase of the na-tional oil reserve project. Other cities in Gansu are expected to be part of the third phase. China will have a reserve capacity of over 90 days' worth of crude oil when all three phases are completed, according to Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University.

"China should make use of the good opportunity of sliding global energy demand to encourage enterprises to increase oil storage at idle commercial oil reserves," said Zhang Guobao, director of the China Energy Commission.

Earlier reports said China plans to build large-scale liquefied natural gas (LNG) reserves to improve urban energy security. China has six natural gas storage facilities with a total capacity of 3 billion cubic meters.

Source: Global Times

(Editor:黄硕)

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