China’s First SPR Announcement

China’s First SPR Announcement
China’s First SPR Announcement

China made its first official announcement about its strategic petroleum reserve (SPR) on Thursday, saying the first phase of the government emergency stockpile is storing about 91 million barrels of oil, or about nine days of oil use, Reuters said in a report.

The announcement by China’s National Bureau of Statistics came after President Xi Jinping made a pledge during the G20 summit to start regularly releasing information on the country’s oil inventories.

The report gave details of the four sites that make up the SPR’s first phase, but did not mention the larger second or third phases, some details of which have been released through official media and government think-tanks.

China, the world’s second-largest oil consumer, imports nearly 60 percent of the crude it consumes, and eventually aims to meet the OPEC standard of stockpiling enough to cover 90 days of net imports.

It has been reluctant to share oil stocks data, arguing that it would be put at a disadvantage in making oil purchases if the data were public.

The SPR’s first phase, located in four coastal sites, was fully filled by early 2009 as China took advantage of a steep falls in the global oil markets amid the financial crisis, Zhang Guobao, the top energy official at the time said.

The statistics bureau said the oil bases are storing a total of 12.4 million tons of crude, or 91 million barrels, just under 90 percent of the total storage capacity of 103 million barrels.

China said it has plans to complete the construction of the second phase by 2020, partly by encouraging private investment in the storage facilities.

Industry officials and traders believe the second phase, designed to hold 170 million barrels, is partially filled. The government has said it plans to begin the third phase by 2020.

  $45.6 b Investment for Pakistan

The Chinese government and banks will finance Chinese companies to build $45.6 billion worth of energy and infrastructure projects in Pakistan over the next six years, according to new details of the deal seen by Reuters on Friday.

The Chinese companies will be able to operate the projects as profit-making entities, according to the deal signed by Prime Minister Nawaz Sharif during a visit to China earlier this month.

At the time, officials provided few details of the projects or the financing for the deal, dubbed the China-Pak Economic Corridor (CPEC).

The deal further cements ties between Pakistan and China at a time when Pakistan is nervous about waning U.S. support as troops pull out of Afghanistan.

Pakistan and China, both nuclear-armed nations, consider each other close friends. Their ties are underpinned by common wariness of India and a desire to hedge against US influence in South Asia.

China has promised to invest around $33.8 billion in various energy projects and $11.8 billion in infrastructure projects.

Two members of Pakistan’s planning commission, the focal ministry for the CPEC, and a senior official at the ministry of water and power shared the details of the projects.

The deal says the Chinese government and banks, including China Development Bank, and the Industrial and Commercial Bank of China Ltd (ICBC), one of China’s ‘Big Four’ state-owned commercial banks, will loan funds to Chinese companies, who will invest in the projects as commercial ventures.