Construction has begun on an extensive underground oil warehouse in eastern China as part of efforts to ensure the country’s energy security. The Xinhua news agency reported in December on the progress of this project called Daxie, located in Ningbo, Zhejiang province and owned by the state-owned company China National Offshore Oil Corporation (CNOOC).
About the underground oil warehouse
Once operational, it will become the main commercial oil storage facility in the country, playing a crucial role in ensuring a stable supply of oil and gas resources for China.
The system of hermetic caverns, artificially excavated in fractured rock below the water table, will have the capacity to store three million cubic meters, equivalent to about 2.5 million tons.
According to the agency, this project will be 20% cheaper to construct and will cost half as much to operate compared to surface oil storage facilities. According to The Paper, the total investment reaches approximately 3 billion yuan ($417 million) and construction is expected to be completed in 2026.
China, as the world’s largest buyer of crude oil, imports most of its necessary supplies, recording imports of 508.2 million tons of crude oil last year. Saudi Arabia topped the list of suppliers, supplying 87.5 million tonnes, closely followed by Russia with 86.2 million tonnes.
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