Foreign Correspondence

[Amaunet]

A clear indication China preparing for war

China to start filling oil reserves next year

President Bush has a long-standing position that the U.S. Strategic Petroleum Reserve, a vast stockpile of oil stored underground should only be used in the event of a critical cutoff of fuel needed to maintain the country’s national defense.

“That petroleum reserve is in place in case of major disruptions of energy supplies to the United States,” Bush said Wednesday. “The idea of emptying the Strategic Petroleum Reserve would put America in a dangerous position in the war on terror. We’re at war. We face a tough and determined enemy on all fronts, and we must not put ourselves in a worse position in this war, and playing politics with the Strategic Petroleum Reserve would do just that.” - May 19, 2004

The Strategic Petroleum Reserve, established in 1975 after the original OPEC-induced “oil shock,” is a series of underground salt domes in four sites in Texas and Louisiana. Beginning in 2001, when the reserves stood at about 540 million barrels, the Bush administration has been steadily topping off the stockpile, which has a capacity of 700 million barrels. Currently, the SPR contains about 660 million barrels.
http://www.msnbc.msn.com/id/5015445/

House Panel OKs Oil Reserve Measure
Source: Associated Press
Publication date: 2001-10-04
In the aftermath of the Sept. 11 attacks and prospects of U.S. military retaliation, there has been concern over future oil supplies, although Middle East suppliers, including Saudi Arabia and Kuwait, have vowed to keep supplies stable.
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-Am

China to start filling oil reserves next year

SYDNEY: China, the world’s second-biggest oil consumer, may begin filling a strategic oil stockpile in the next year as demand at home surges and concerns mount over global supply disruptions, a senior government official said on Monday.

Zhou Dadi, director general of the Energy Research Institute, said China would initially store enough oil to meet demand for 20 days before increasing the stockpile further. “We are building storage facilities right now ... Within the next year could be a starting point to fill the storage step by step,” Zhou told Reuters on the sidelines of the World Energy Congress in Sydney.

Zhou did not specify how many tanks would be ready for use from next year.

“Last year we imported about 80 million tonnes (2.19 million barrels per day) of crude oil, but this year it could be more than 100 million tonnes, so the 20 days is just a start.” Official customs data for 2003 showed that China imported 91 million tonnes of crude oil.

China imports more than 40 percent of its crude needs, a proportion that is rising as domestic production declines and consumption shoots higher to fuel robust economic growth.

Chinese oil firms usually hold between 10 and 30 days of oil stocks as part of commercial operations, but Beijing has become increasingly concerned over the last couple of years over its lack of emergency stockpiles as oil prices have risen to record levels close to $50 a barrel and China’s demand has jumped.

Most industrialised nations hold huge reserves. The United States, the world’s largest oil consumer, held 668.4 million barrels at the end of August and plans to raise inventories to 700 million in 2005. But in Asia only Japan and South Korea, which import virtually all of their oil and gas requirements, hold emergency stocks. China and India have long talked of plans.

Four sites earmarked: China has earmarked four sites on the eastern seaboard — Zhenhai and Aoshan in Zhejiang province, Huangdao in Shandong and Dalian in Liaoning — to build 16 million cubic metres (100.6 million barrels) of strategic reserves, about 20 days of consumption.

Top refiner Sinopec has started construction of 5.2 million cubic metres of storage in Zhenhai. These tanks are expected to be the first to be filled. Zhou said he did not expect growth in China’s oil demand in 2005 to exceed this year’s rate of 7-10 percent, while increases in electricity capacity should ease the power crunch on industry. reuters

http://www.dailytimes.com.pk/default.asp?page=story_12-9-2004_pg5_27