China will complete the construction of its first four strategic oil reserve bases that can store over 16.4 million cubic metres by the end of this year, ensuring steady supplies to fuel its double-digit GDP growth.
"The progress has been smooth and all the four bases will be completed by the year end," Zhang Guobao, administrator of the National Energy Administration (NEA), said.
"Their total capacity will amount to 16.4 million cu m," Zhang said at his first public appearance since the NEA's inauguration on August 8.
The administration came into being as part of the reshuffle of government agencies in March. Zhang also holds the position of vice-minister of the National Planning and Reform Commission (NDRC), the nation's top economic planner.
China started to build its strategic oil reserves in 2004 to fend off the risk of oil shortages and reduce the impact of oil price fluctuations. The government plans to build strategic oil reserves in three phases over 15 years, involving an estimated investment of $14.6 billion.
The first four reserves, located in Dalian, Qingdao, Ningbo and Zhoushan, are expected to maintain strategic oil reserves equivalent to 30 days of imports in 2010.
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The reserve in Ningbo, a coastal city in Zhejiang province, was put into operation in late 2006. It is the largest of the first four reserves, with a total storage capacity of 5.2 million cu m.
The Chinese government is now reportedly selecting locations for the second batch of strategic oil reserves. Cities including Tangshan and Guangzhou are understood to be vying for the projects, but Zhang declined to comment on this.