China to Complete Two Oil Reserve Sites This Quarter, IEA Says
February 11, 2012, 10:33 AM ESTBy Bloomberg News
Feb. 10 (Bloomberg) -- China will complete construction of two strategic petroleum reserve sites in the first quarter, according to the International Energy Agency.
Depots in Jinzhou with 18.9 million barrels of capacity and Tianjin with 22 million barrels are scheduled to be built by the end of March, the Paris-based IEA said in its monthly market report today, citing unidentified news reports. Four more sites under this second phase of the stockpile program will be operational by early 2013, it said. Sites at Dushanzi and Lanzhou, each with a capacity of 18.9 million barrels, were operational in the second half of last year, according to the report.
China, the world’s biggest energy consumer, is expanding its crude storage capacity to ensure supply and reduce exposure to international price fluctuations. The eight sites in the second-phase program are planned to add 169 million barrels of capacity to the 103 million built and filled in the first phase.
The new storage centers “could materially affect Chinese crude oil demand in 2012,” the IEA said in the report. “This would imply 220 thousand barrels a day of crude demand if they were filled steadily throughout the year. However, in reality, the pace of buying will be influenced by market conditions.”
China plans to construct further capacity of nearly 230 million barrels in a third phase to boost its emergency stockpile capacity to around 500 million barrels by 2016, the IEA said. China raised its oil-inventory capacity to 40 days of supply by the end of last year, China National Petroleum Corp. said Jan. 31.
The IEA also cut its forecast for China’s oil-product demand growth this year to 3.9 percent from an estimate of 4.3 percent in January. The economy will expand 8.2 percent, down from a previous forecast of 9 percent, the agency said. The IEA cut its forecast for oil-product demand growth by 0.9 percentage points in its January report.
--Editors: Paul Gordon, Christian Schmollinger
To contact the reporter on this story: Jing Yang in Shanghai at jyang251@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net
