China Invests Significantly in Incremental Crude Oil Storage

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Researched by Industrial Info Resources (Sugar Land, Texas)--Asia's crude oil imports saw robust growth this year, with countries such as China and India importing as much as 11.31 million and 5.33 million barrels per day (BBL/d), respectively, in January. China, the biggest buyer of crude globally, issued full-year import quotas for the first time, easing the import process for local refiners and encouraging crude stockpiling.

Despite a struggling economy led by a crisis in the real-estate market, rising unemployment and low foreign investments, China's demand for crude has been peaking. With lockdowns lifted, tourism recovering and manufacturing activities picking up, China's oil demand is nearly back to pre-pandemic levels.

The growing demand for gasoline and diesel has prompted refineries to ramp up crude processing, as well as replenish strategic reserves. Although China doesn't publish official inventory data and is secretive about its strategic oil reserves, experts suggest that China added about 1.39 million BBL/d to inventories in December, up sharply from about 20,000 BBL/d in November and the nation's highest since June 2023. Storage is anticipated to continue this year as Brent prices stabilize, which likely will lead China to build inventories, buffering itself from any future volatility in oil prices.

Industrial Info is tracking 306 operational crude oil-storage facilities in China, most of which are in Shanxi (66) and Shandong (65). Industrial Info also is tracking more than 80 active capital-spending projects, totaling more than US$21 billion of investment, across China that are geared toward crude oil storage capacity.

The Shandong province is the biggest driver of investment, with a market share of 23% and an investment value of US$5 billion across 27 projects. It is followed by Fujian, with a total investment of about US$3.3 billion, and Zhejiang with about US$3.2 billion. Other provinces investing heavily include Guangdong, Liaoning, Jiangsu and Hebei.

China National Petroleum Corporation (Beijing, China), SINOPEC Group (Beijing) and Fujian Hengtuo Investment Company Limited (Fujian, China) are the top players in the market, with a combined investment of US$7.4 billion and a market share of 34%. Fujian Hengtuo Storage Company, a subsidiary of Fujian Hengtuo Investment Company, is expected to invest heavily in the construction of underground caverns in Luoyuan County. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Storage Project and Plant databases can learn more from a detailed project report and plant profile.

Subscribers can click here for a full list of detailed reports for active and planned crude oil-storage projects across China, and click here for a full list of profiles for operational crude-oil storage facilities.

With 36% of the investment under construction, 26% in the initial planning stages, and 24% in the latter engineering stages, most of these projects are expected to be completed by December 2025, while the rest will reach fruition by May 2029.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).