Singapore — China is set to expand its commercial crude storage capacity by at least 15.11 million cubic meters, or 95.04 million barrels, by the end of 2020, according to company sources and media reports.
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The new capacity, which will create more space to stockpile imports, comes as recent customs data showed China's crude imports hit an all-time high of 11.37 million b/d in May.
Data from trade flow and inventory tracker Kpler showed that China's crude stocks have been rising since the week starting May 10 and hit a record high of 831 million barrels in the week starting May 31. This was up 6.8% from the previous all-time high of 778 million barrels recorded in the week starting June 9, 2019.
Among the new storage facilities, Hengli Petrochemical (Dalian) will have the biggest capacity at 3.6 million cu m, or 22.64 million barrels, a company source told S&P Global Platts.
Hengli started construction of the storage tanks in late first-quarter of 2020 and plans to complete in the shortest time possible by July so that it can start storing crude at current low prices. Typically, a storage facility of this size takes more than a year to complete.
Hengli will construct a total of 24 new crude storage tanks, each of 150,000 cu m capacity. "We plan to start up six of the new tanks [or 900,000 cu m] in July, and gradually put the rest into use in the second half of the year," the company source with Hengli said.
Located on the Changxing Island in Northeast China, the Hengli storage facility currently has 32 crude storage tanks, each of 100,000 cu m. With the addition of the 24 new tanks, Hengli's total storage capacity will be more than doubled to 6.8 million cu m.
Chinese refiner Sinopec started operations at its new Baisha Bay Phase II storage facility in Shanghai from June 1, according to Shanghai Petrochemical's WeChat platform.
In addition to the 950,000 cu m of storage that is already under operation at the site, the startup of the Phase II storage facility brings the total capacity of the Baisha Bay facility to 1.4 million cu m, Shanghai Petrochemical said.
Sinopec also completed construction of a 800,000 cu m storage facility in central China's Luoyang city in May. This is expected to be online from second-half of 2020, Platts has reported. Another 800,000 cu m of storage capacity will be added to the Luoyang site by June 2021.
The Luoyang storage facility will support Sinopec Luoyang Petrochemical's requirements as it expands refining capacity from the current 160,000 b/d to 200,000 b/d in 2021.
Sinopec also started operating its storage tanks -- with capacity of 1.6 million cu m -- at Dongjiakou port in east China's Shandong province from March.
With all these additions, Sinopec's total commercial crude storage capacity is set to increase by at least 2.85 million cu m, or 17.93 million barrels, in 2020.
Most of the new storage capacity will be added in the Shandong province -- long considered the Texas of China and home to about 80% of China's small independent refiners.
The province will see its crude storage capacity rise by 10.26 million cu m, or 64.54 million barrels, by the end of 2020, Platts has reported.
China's planned new crude oil storage tanks in 2020 (mil cu m)
Source: S&P Global Platts, company sources, company reports