CNOOC's Dongying crude storage facility in Dongying, East China's Shandong Province Photo: Courtesy of CNOOC

Chinese state-owned oil and gas giant China National Offshore Oil Corp (CNOOC) said it has completed a commercial crude reserve storage complex in East China, the largest single-phase storage facility in China so far, which is capable of holding 4.25 million tons of crude oil.

CNOOC said on Thursday that its storage facility at Dongying, East China's Shandong Province is now being filled and has entered trial operations.

The project will beef up China's crude supply capacity, improve supply/demand dynamics, rapidly lift energy trade and help cope with emergencies, the company said in a statement sent to the Global Times. 

The facility occupies an area of 1.2 million square meters with 50 storage tanks each capable of storing 100,000 cubic meters of crude oil.

At full capacity, the facility - with a price tag of 6.4 billion yuan ($930 million) - could store 4.25 million tons of crude oil.

The facility will receive crude extracted by offshore platforms in the Bohai Sea via undersea pipelines and short-distance surface transport, according to Wu Guangzhao, general manager of a CNOOC subsidiary in Dongying.

"With nearby refining capacity, domestically extracted offshore crude could be stored, refined and distributed more quickly to replace imported crude at the regional level," Wu said.

Besides, the construction of the facility could resist 100-year floods.

For the Port of Dongying, the CNOOC storage facility is expected to boost throughput by 15 million tons and increase foreign trade value by 20 billion yuan, according to the company.

The Bohai Sea Oilfield is China's largest offshore oil producing base, churning out 31.75 million tons of crude in 2022. The field is also close to Beijing and Tianjin municipalities.

To ensure energy security amid a highly volatile global market, China has been ramping up domestic output and expanding its energy storage capacity in recent years.

On Wednesday, the International Energy Agency (IEA) revised up global crude demand for 2023, due to China's optimization of epidemic control measures. 

Global crude demand will be driven up by 2 million barrels per day (bpd) to 101.9 million bpd, according to the IEA's latest oil market report. Of the total, 900,000 bpd will go to a "resurgent China," it said.

Global Times