Fuel store to cost US$71m

SHANGHAI'S first emergency fuel storage facility will cost 520 million yuan (US$71.2 million) to build, nearly double the original budget, the Shanghai Chemical Industry Park said at the weekend.

A foundation-laying ceremony was held on Saturday at the chemical park, about 50 kilometers southwest of the city proper. Construction will start soon and the facility will be operational by early 2009.

The project, to be built by the Bailian Group, will include 18 oil tanks with a combined storage capacity of 200,000 cubic meters. Some 30,000 tons of refined oil products, mainly diesel, will be stored, the equivalent of five to seven days of Shanghai's needs, ready to be used in the event of any disruption of supplies.

Shanghai's daily diesel consumption is estimated at 6,700 tons this season, according to Sinopec.

A diesel shortage hit the nation in October and November after crude oil prices surged, forcing state oil companies Sinopec and PetroChina to refine more fuel and arrange more imports. Sinopec said the shortfall was eased in Shanghai early this month.

The Bailian depot base will help ease the effect of volatile global oil prices on domestic economy, and improve the seasonal supply conditions in domestic market, the chemical park said.

The project will also include handling facilities, linking roads and railways, support production facilities and an administration area.

The chemical park said in April that the project would cost 270 million yuan when it signed agreements with Bailian regarding investment and land use rights.