China to Start Filling Strategic Oil Reserves Next Year
Country: INDIA / CHINA
Chinese oil demand is expected to keep growing at or above forecast GDP growth of 8 percent this year, Zhang Xiaoqiang, vice chairman of China's National Development and Reform Commission (NDRC) said on Thursday.
China imports more than 40 percent of its crude needs, a proportion that is rising as domestic production declines and consumption shoots higher to fuel robust economic growth.
Ten million barrels of storage capacity in the east coast city of Ningbo is due to be ready for use in August, the first phase of a strategic petroleum reserve (SPR) of 150 million barrels planned for completion in three to five years.
Chinese oil firms usually hold between 10 and 30 days of oil stocks as part of commercial operations, but Beijing has become increasingly concerned over the last couple of years over its lack of emergency stockpiles.
A 15 percent surge in Chinese fuel demand last year -- above the pace of the country's wider economic growth -- helped drive world oil prices to record highs.
"In 2005 we will still see a relative rapid increase in energy consumption," said Xiaoqiang.
China is trying to reduce the energy intensity of its heavy industry to bring energy efficiency closer to western norms, Xiaoqiang said. In industrialised nations oil demand growth is generally less than half GDP growth.
"Our energy consumption rate will be reduced step by step so we can use doubling of energy consumption to support a quadrupling of GDP," he said.
The scale of last year's prices rise endangered economic health both in China and across the globe, he said.
"Last year prices went above $50. Some say this is dangerous not only for China but for the world economy and I agree with this opinion," he said.