Sinopec mulls adding commercial fuel stockpiling

China's top refiner Sinopec is considering adding four large commercial storage facilities capable of holding a total of 8 million tonnes of refined oil products, to boost its supply capacity.

The volume would equal more than half of China's production of gasoline, diesel and kerosene in February, or meet nearly 10 days of domestic demand at current rates.

Sinopec readied several crude oil stockpiling facilities recently and a senior adviser said this month the company would sharply increase its crude and fuel inventories this year.

The government has not given more support to commercial fuel stockpiling but Sinopec has begun preparatory work to increase buffer supplies to protect against future supply shortages, state media cited Wang Tianpu, Sinopec's president, as saying.

The four commercial facilities will be based throughout China.

"Sinopec is considering building the four bases, and is likely to build the second phase of strategic oil reserve bases in Rizhao and Qingdao," the Shanghai Securities News quoted Wang as saying. "Qingdao will be an underground storage facility."

China has completed its first phase of state strategic oil reserve bases, which could hold 102 million barrels of oil by the end of last year.

Beijing has planned a second phase that will be able to store around 170 million barrels, but has not officially disclosed where the facilities would be located or how much investment would be involved.

Government tanks are normally built by state-owned oil majors.

State media had reported that Jinzhou in northeastern Liaoning province and Qingdao were among the sites for the second phase of state emergency reserves.