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China pushes ahead with strategic oil reserve

China pushes ahead with strategic oil reserve

Shanghai: Following record oil imports in January, China is pushing ahead with its strategic oil stockpile and could require some companies to establish their own corporate reserves, to supplement the Government's own stocks, according to press reports. Director of the National Development and Reform Commission Ma Kai, speaking in Beijing yesterday, said the Government's stockpile was "on track" and would not pose a threat to world oil markets.

Chinese oil consumption has more than doubled over the last ten years and the International Energy Agency recently raised its estimate of China's 2007 crude imports from 7.35m barrels a day, to 7.56m. Despite moves to raise energy prices and encourage energy conservation, there is little sign of imports slowing as the economy is once again expected to grow by more than 10% this year.

According to the official Shanghai Security News, which quoted a different senior official of the same Commission, China's foremost economic planning body, Government reserves could be supplemented by private corporate reserves in a more to provide a greater cushion against major supply disruptions.

China is building four oil reserves and has spent close to $800m so far, according to the Xinhua news agency. Two of the sites in Zhejiang province have already been commissioned whilst the others - in Shandong and Liaoning provinces, are still being built. Senior officials are now considering the construction of additional oil storage facilities, according to reports.  [15/03/07]