Shanghai's first storage facility for refined oil products will
be ready in early 2009 to provide a back-up energy supply.
The foundation was completed late last year at the Shanghai
Chemical Industry Park, the Shanghai Securities News
reported yesterday.
The project received a 520 million yuan investment from the
listed arm of Shanghai's leading retailer Bailian Group.
The project will be able to store 200,000 cubic meters of
refined oil products, including an emergency reserve of 30,000 tons
of diesel - enough to cover a shortage for up to a week.
Experts said the move will help offset oil price fluctuations
caused by ups and downs on the international market and will
benefit companies in Shanghai and other areas in the Yangtze River
Delta.
China is the world's second largest oil consumer after the
United States. But many parts of the country are facing severe fuel
shortages, with demand outpacing supply from refiners squeezed by
soaring crude oil prices.
In Shanghai, fuel supply has been up and down in recent years
due to rising global crude oil prices and temporary shutdowns of
domestic refineries for maintenance checks.
Bailian Group and the industry park signed agreements in April
last year on investment in and land use rights at the storage
facility.
The project comprises 18 oil tanks of different sizes, and is
backed by the Shanghai Fuel Co. It will include four zones - an oil
storage area, deliveries and loading station, subsidiary production
area and an administrative zone.
Covering fuel oil, diesel and gasoline, the reserve will
circulate 3 to 4 million cubic meters of oil products every year -
a steady and reliable supply for companies in the chemical industry
park.
The company said the reserve would ease the seasonal fuel supply
disruption.
The government started a strategic oil reserve base program in
2004 to offset oil supply risks and reduce the impact of
fluctuating global energy prices, which impact the domestic market
for refined oil.
The bases are designed to maintain strategic oil reserves
equivalent to 30 days of imports, or about 10 million tons.
(China Daily January 3, 2008)
