First SPR Finished
China has finished building the first of four planned strategic petroleum reserves, but it’s not clear whether that facility, located in Zhenhai in Zhengjiang province, has begun accepting crude oil yet. By 2008, China expects to finish the other three SPRs, located in Dalian (Liaoning province), Huangdao (Shandong province), and Zhoushan (Zhengjiang province).
The Zhenhai facility is designed to hold 33 million barrels – about one-third of China’s projected SPR capacity of 106 million barrels. The Zhoushan SPR will be about the size of the one in Zhenhai, and it is supposed to be completed by the end of 2006. China will buy the crude for the SPRs on the open market. And when China starts buying that crude, it will add yet more demand to the spot market.