China starts building first oil reserve in Xinjiang: official

“We started building the oil reserve at Dushanzi in Xinjiang yesterday ... marking the start of the Phase-II oil reserve base,” said Zhang Guobao, head of the National Energy Administration, at a news conference.

The official Xinhua news agency said that the 5.4-million-cubic-meter reserve would store crude produced in Kazakhstan and Russia and was expected to begin filling in October next year.

It would account for 20 percent of the total storage capacity of China's Phase-II strategic reserve programmed, the report said.

Construction of an additional six power projects in Xinjiang also started Thursday, including three power plants, a power grid, a liquefied natural gas plant and a coal mine, Xinhua said.

Total investment in the seven projects would exceed 23 billion yuan (US$3.4 billion) and create 6,000 jobs, it added.

China would “definitely” continue to expand its strategic oil reserves after the second phase was completed to meet the nation's long-term goal of building enough storage capacity for 90 days' use, Zhang told reporters.

Phase-I strategic oil reserves in Zhenhai, Huangdao and Zhoushan in the east and Dalian in the northeast were filled earlier this year, with a total storage capacity of 16.4 million cubic meters, state media have said.

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