China National Petroleum Corporation (CNPC), the nation's largest oil producer, said it has started a 680 million yuan crude oil storage project in Jinzhou, Liaoning Province.

The project consists of six crude oil storage tanks, each with a capacity of 100,000 cu m, CNPC said on its website.

The company said the project is of "strategic importance" to its investment in Jinzhou, a northeastern port city. It will further help Jinzhou to become an important port for oil products in the country.

Jinzhou is important for trade in oil products, bulk ore and coal shipping. CNPC had earlier become the third largest shareholder of Jinzhou Port Co Ltd with a 9.33 percent stake, or 98.475 million shares.

It got 83.475 million and 15 million Jinzhou Port shares respectively from CNPC Jinzhou Petrochemical Corp and CNPC Jinxi Refining and Chemical Complex, both wholly owned by CNPC.

China's two oil majors, CNPC and Sinopec, have increased their pace in crude oil and oil product storage. Sinopec, Asia's top refiner, has set up a unit to manage its oil storage. The Sinopec Commercial Crude Reserve Center, the first of its kind in China, will manage the financing of oil purchases and their flows into and out of storage facilities.

Last year Sinopec's oil depot in Tianjin began commercial operation. The Nanjiang oil depot, located in Tanggu, has six oil tanks, each with a storage capacity of 100,000 cu m.

The oil depot will supply crude to Sinopec's refining unit, Beijing Yanshan PetroChemical, through a 228 km crude pipeline, which has an annual designed capacity of 2 million tons, said the company

The Tanggu-Beijing crude pipeline also came onstream last year.

CNPC had earlier announced setting up an oil storage tank in Changde City, the first of its kind in Hunan Province, with a capacity of 20,000 cu m.

The depot, covering 38,000 sq m, cost the company 52 million yuan and will receive oil supply from CNPC refineries in northeast and northwest China and ease Hunan's oil shortage.

The company is now building a commercial crude oil reserve base in Shanshan County in the Xinjiang Uygur Autonomous Region.

The company plans to invest 6.5 billion yuan in the project, which will have a storage capacity of 8.1 million cu m, a company source had told China Daily earlier.

(China Daily May 6, 2008)