BEIJING - China will take advantage of falling oil prices to boost imports and build up its fledgling oil reserves against supply shocks, a top official said in a rare disclosure of energy strategies in the wake of the global economic turmoil.
Zhang Guobao, head of the National Energy Administration, said in remarks published on Monday that China would actively push forward construction of the second phase of state strategic oil reserves, having largely completed the first.
The government has never disclosed if the tank farms set up in four locations in the first phase -- with total capacity of some 102 million barrels -- have been fully filled.
Although Zhang's words about "completion" of the first phase were ambiguous, since they could refer either to building or filling the tanks, they lent credence to signs that the world's second-largest oil consumer has at least started filling a third base in Huangdao.
Industry sources told Reuters that around 7.3 million barrels of oil had been injected into Huangdao in November and more stockpiling was planned in December and January.
The first two bases, at Zhenhai and Zhoushan, were up and running more than a year ago. Construction of the Dalian facility, the fourth base, was due for completion by year-end.
China has completed planning of the second phase of government storage facilities that could hold up to 26.8 million cubic meters of oil, or some 170 million barrels, but has not disclosed where the facilities are located or whether construction has begun.
Oil prices are on track for a near 60 percent drop this year, the biggest annual fall since futures began trading 25 years ago, and are down more than $108 a barrel from its record-peak in July.
China's plan to raise imports for its reserves could offer some short-term hope on global demand, which has been dented by fears of a deepening global recession.
The country would also encourage its oil firms to use spare storage capacity to increase commercial stockpiling of oil resources, Zhang said in a report in the official People's Daily.
State-owned Sinopec (0386.HK)600028.SS> completed the construction of storage tanks with a capacity of 3.8 million cu m in coastal Zhejiang province last week, while rival PetroChina (601857.SS)(0857.HK) has begun to fill a new 1 million cu m facility in northwestern Xinjiang region with Kazakhstan oil.
Private fuel traders, long living under the shadow of the oil duopoly because they are short of independent fuel supplies, have also indicated they are interested in storing government oil, state media has reported.
China would take advantage of opportunities from the financial crisis and weak energy markets to expand energy cooperation with neighboring countries and major producers, Zhang said.
It would push forward the construction of China-Myanmar oil and gas pipelines while proceeding with China-Central Asia gas pipes and the second phase of China-Kazakh oil lines, he said.
COAL CONSUMPTION SLOWS, WIND BOOST
Zhang also flagged a huge rise in China's wind power aims, saying the nation wanted wind capacity to grow from 10 Gigawatt in 2008 to 100 GW by 2020, more than tripling a 2020 wind target of 30 GW that was published a year ago.
A drive toward wind could benefit manufacturers such as Suzlon Energy (SUZL.BO) and China High-Speed Transmission (0658.HK).
Zhang expected China's coal consumption this year to rise by only 4.5 percent from a year earlier to 2.74 billion metric tons, growth that is slower by 5 percentage points versus the 2007 rate, because of weakening economic expansion.
Coal stocks at China's five major power generating groups surged to a record-high of over 50 million metric tons at the beginning of December, enough for one month's generation.
Coal prices have been declining for months.
"The downward trend in the domestic consumer price index and falling international prices for major staple energy commodities provide an opportunity and room to normalize the pricing mechanism for coal used in power plants," Zhang said.
Prices for coal used in power plants are often lower than those for other users.
Coal miners and power firms have confronted each other in annual supply talks in recent years, with miners pushing for higher prices amid a global rally but power firms insisting on the need to supply electricity at rigid state-set tariffs.
The nation's top five power groups failed to reach agreement with coal miners on next year's supply talks after a week of discussions in Fuzhou, capital of Fujian province, the official China Securities Journal reported on Monday.
The country would in 2009 start building four nuclear power stations, including two in eastern Shandong, one in Zhejiang and one in Guangdong province, Zhang said.
Two stations are supposed to adopt technologies from U.S.-based, Japanese-owned Westinghouse and one from France's Areva (CEPFi.PA), earlier plans showed.
Zhang Guobao, head of the National Energy Administration, said in remarks published on Monday that China would actively push forward construction of the second phase of state strategic oil reserves, having largely completed the first.
The government has never disclosed if the tank farms set up in four locations in the first phase -- with total capacity of some 102 million barrels -- have been fully filled.
Although Zhang's words about "completion" of the first phase were ambiguous, since they could refer either to building or filling the tanks, they lent credence to signs that the world's second-largest oil consumer has at least started filling a third base in Huangdao.
Industry sources told Reuters that around 7.3 million barrels of oil had been injected into Huangdao in November and more stockpiling was planned in December and January.
The first two bases, at Zhenhai and Zhoushan, were up and running more than a year ago. Construction of the Dalian facility, the fourth base, was due for completion by year-end.
China has completed planning of the second phase of government storage facilities that could hold up to 26.8 million cubic meters of oil, or some 170 million barrels, but has not disclosed where the facilities are located or whether construction has begun.
Oil prices are on track for a near 60 percent drop this year, the biggest annual fall since futures began trading 25 years ago, and are down more than $108 a barrel from its record-peak in July.
China's plan to raise imports for its reserves could offer some short-term hope on global demand, which has been dented by fears of a deepening global recession.
The country would also encourage its oil firms to use spare storage capacity to increase commercial stockpiling of oil resources, Zhang said in a report in the official People's Daily.
State-owned Sinopec (0386.HK)600028.SS> completed the construction of storage tanks with a capacity of 3.8 million cu m in coastal Zhejiang province last week, while rival PetroChina (601857.SS)(0857.HK) has begun to fill a new 1 million cu m facility in northwestern Xinjiang region with Kazakhstan oil.
Private fuel traders, long living under the shadow of the oil duopoly because they are short of independent fuel supplies, have also indicated they are interested in storing government oil, state media has reported.
China would take advantage of opportunities from the financial crisis and weak energy markets to expand energy cooperation with neighboring countries and major producers, Zhang said.
It would push forward the construction of China-Myanmar oil and gas pipelines while proceeding with China-Central Asia gas pipes and the second phase of China-Kazakh oil lines, he said.
COAL CONSUMPTION SLOWS, WIND BOOST
Zhang also flagged a huge rise in China's wind power aims, saying the nation wanted wind capacity to grow from 10 Gigawatt in 2008 to 100 GW by 2020, more than tripling a 2020 wind target of 30 GW that was published a year ago.
A drive toward wind could benefit manufacturers such as Suzlon Energy (SUZL.BO) and China High-Speed Transmission (0658.HK).
Zhang expected China's coal consumption this year to rise by only 4.5 percent from a year earlier to 2.74 billion metric tons, growth that is slower by 5 percentage points versus the 2007 rate, because of weakening economic expansion.
Coal stocks at China's five major power generating groups surged to a record-high of over 50 million metric tons at the beginning of December, enough for one month's generation.
Coal prices have been declining for months.
"The downward trend in the domestic consumer price index and falling international prices for major staple energy commodities provide an opportunity and room to normalize the pricing mechanism for coal used in power plants," Zhang said.
Prices for coal used in power plants are often lower than those for other users.
Coal miners and power firms have confronted each other in annual supply talks in recent years, with miners pushing for higher prices amid a global rally but power firms insisting on the need to supply electricity at rigid state-set tariffs.
The nation's top five power groups failed to reach agreement with coal miners on next year's supply talks after a week of discussions in Fuzhou, capital of Fujian province, the official China Securities Journal reported on Monday.
The country would in 2009 start building four nuclear power stations, including two in eastern Shandong, one in Zhejiang and one in Guangdong province, Zhang said.
Two stations are supposed to adopt technologies from U.S.-based, Japanese-owned Westinghouse and one from France's Areva (CEPFi.PA), earlier plans showed.
