Oil Giants Looking To Add Capacity And Stockpile Zone To Tianjin Port Of China

China's two biggest oil companies each plan to establish a 300,000-ton crude oil terminal in northern China's Tianjin Port as part of the country's strategy to increase oil supplies to Beijing and Tianjin.

China Petrochemical Corp, or Sinopec Group, plans to start construction on the project next year, Yu Rumin, chairman of Tianjin Port, said on Wednesday.

The work follows on Sinopec's establishment of the first such terminal in the port, a project that began operating in November 2008.

The company, the biggest refiner in Asia, will also establish a stockpile zone where crude oil from the terminals will be stored, Yu said at the National People's Congress session in Beijing. Work is to start on that project in July.

China National Petroleum Corp, the country's biggest oil producer, is also talking with the Tianjin Port about building its first crude-oil terminal there. It has not set a schedule for that proposed work.

Sinopec said it knows nothing about the project, and CNPC could not be reached immediately for comment.

China, the second biggest oil consumer in the world, has increased the pace of its oil imports in recent years to meet a surge in demand for the fuel.

CNPC forecast that China will import 266 million tons of crude oil in 2012, when the country's annual oil output may level off at 220 million tons.

The net amount of crude oil China imported increased by 6.3 percent in 2011 from a year before. That was the first time since 2006 that the figure had not shown a double-digit increase, according to Chinese customs data.

"We plan to add two more 300,000-ton crude-oil terminals to the port after 2015 to meet demand from rising crude imports," Yu, deputy to the NPC, said.

In addition, Yu said that work on the first phase of a liquefied-natural-gas terminal is expected to start next March. China National Offshore Oil Corp will hold a 51 percent share of the project, while the port will have a 44 percent share and a local gas company the rest.

In total, 5.7 billion yuan ($903.2 million) have been invested in the terminal, which is designed to process 2.2 million tons a year. Construction began on it in February and the project is meant mainly to guarantee a supply of gas to Beijing and Tianjin. LNG is to be imported from Australia, Qatar and various other places.

Yu said the port is too small to accommodate additional LNG terminals. He said the port nonetheless plans to build one or two such terminals after 2015, when the southern part of the port will be expanded eastward through land reclamation.