China Delays Emergency Oil Storage Completion to Beyond 2020Bloomberg News
SPR's second-phase seen finished by 2020 under new 5-year plan
Country targets SPR equivalent to 100 days of crude imports
China has pushed back completion of its emergency petroleum stockpiles to beyond the original 2020 deadline.
The world’s largest energy consumer will finish construction of the second phase of its strategic oil reserves and begin preliminary work on additional sites by 2020, according to the 2016-2020 Five Year Plan released over the weekend. The country’s previous plans called for three phases to be completed by the end of the decade.
“China may have reached its current storage capacity limit and it takes time to build up new” reserve sites, said Lu Wang, an analyst at Bloomberg Intelligence in Hong Kong. “Some SPR will be stored underground, which might take more time to build and cause the delay."
China took advantage of falling crude prices last year to build up its emergency reserves, helping to partially mop up a global oil glut. The country increased imports by 8.8 percent to a record 335.5 million metric tons (about 6.7 million barrels a day) in 2015 as oil averaged the lowest annual price in more than a decade.
China finished building the first phase of its storage with four sites in 2009, totaling 91 million barrels, according to the National Bureau of Statistics. The second-phase, with a designed capacity of 168 million barrels, was to be completed by last year, the state-run China Energy News said in 2014.
"Completion of the second-phase tanks will probably be delayed for about two years from 2015 while a third-phase program is now quite uncertain,” Li Li, a research director with ICIS China, said by phone.
China stockpiled 26.1 million metric tons (about 191 million barrels) of crude as of mid-2015 at eight SPR sites and commercial storage tanks, the NBS said on Dec. 11.
— With assistance by Jing Yang