China consumed an estimated 7.8 million barrels per day (bbl/d) of oil in 2008, making it the second-largest oil consumer in the world behind the United States. During that same year, China produced an estimated 4.0 million bbl/d of total oil liquids, of which 96 percent was crude oil. China’s net oil imports were approximately 3.9 million bbl/d in 2008, making it the third-largest net oil importer in the world behind the United States and Japan. EIA forecasts that China’s oil consumption will continue to grow during 2009 and 2010, with oil demand reaching 8.2 million bbl/d in 2010. This anticipated growth of over 390,000 bbl/d between 2008 and 2010 represents 31 percent of projected world oil demand growth in the non-OECD countries for the 2-year period according to the July 2009 Short-Term Energy Outlook. By contrast, China’s oil production is forecast to remain relatively flat at 4 million bbl/d in 2009. According to Oil & Gas Journal (OGJ), China had 16 billion barrels of proven oil reserves as of January 2009.

The Chinese government’s energy policies are dominated by the country’s growing demand for oil and its reliance on oil imports. The National Development and Reform Commission (NDRC) is the primary policymaking and regulatory authority in the energy sector, while four other ministries oversee various components of the country’s oil policy. The government launched the National Energy Administration (NEA) in July 2008 in order to act as the key energy regulator for the country. The NEA, linked with the NDRC, is charged with approving new energy projects in China, setting domestic wholesale energy prices, and implementing the central government’s energy policies, among other duties. The NDRC is a department of China’s State Council, the highest organ of executive power in the country. In 2007, China outlined its energy policy goals in the Proposed Energy Law, though the law has yet to be enacted.

China’s national oil companies (NOCs) wield a significant amount of influence in China’s oil sector. Between 1994 and 1998, the Chinese government reorganized most state-owned oil and gas assets into two vertically integrated firms: the China National Petroleum Corporation (CNPC) and the China Petroleum and Chemical Corporation (Sinopec). These two conglomerates operate a range of local subsidiaries, and together dominate China’s upstream and downstream oil markets. CNPC remains the much larger and influential NOC and is the leading upstream player in China. CNPC, along with its publicly-listed arm PetroChina, account for roughly 60 percent and 80 percent of China’s total oil and gas output, respectively. Sinopec, on the other hand, has traditionally focused on downstream activities such as refining and distribution with these sectors making up 76 percent of the company’s revenues in 2007.

Additional state-owned oil firms have emerged in the competitive landscape in China over the last several years. The China National Offshore Oil Corporation (CNOOC), which is responsible for offshore oil exploration and production, has seen its role expand as a result of growing attention to offshore zones. Also, the company has proven to be a growing competitor to CNPC and Sinopec by not only increasing its E&P expenditures in the South China Sea but also extending its reach into the downstream sector particularly in the southern Guangdong Province through its recent 300 billion yuan investment plan. The Sinochem Corporation and CITIC Group have also expanded their presence in China’s oil sector, although their involvement in the oil sector remains dwarfed by CNPC, Sinopec, and CNOOC. The government intends to use the stimulus plan to enhance energy security and strengthen Chinese NOCs’ global position by offering various incentives to invest both upstream and downstream.

The Chinese government decided to launch a fuel tax and reform of the country’s product pricing mechanism in December 2008 in order to tie retail oil product prices more closely to international crude oil market, attract downstream investment, ensure profit margins for refiners, and reduce energy intensity caused by distortions in the market pricing. When international crude oil prices skyrocketed in mid-2008, the capped fuel prices downstream caused some refiners, especially the smaller teapots, to cease production causing supply shortfalls and the major NOCs, particularly Sinopec, to incur substantial profit losses. During the first half of last year, the government issued value added tax rebates on fuel imports and some direct subsidies to stem state-refiners’ losses.

China is taking advantage of the economic recession to liberalize its pricing system and encourage more market responsiveness. When fuel prices fluctuate more than 4 percent of the average crude oil price of three grades over 22 consecutive working days, the NDRC can alter the ex-refinery price. The government also sets transportation charges, processing costs, and refining margins (5 percent when crude prices are below $80/bbl). Additionally, a consumption tax and value-added tax is added for gasoline and diesel fuels. These taxes are set to replace six transportation fees established by local authorities.

In light of these reforms, China has raised fuel prices three times so far in 2009. The latest increases on June 30 were 11 percent for gasoline and diesel, and retail rates are at the highest level in history. Refinery gate prices for gasoline and diesel are now 6,730 yuan/ton and 5,990 yuan/ton, respectively.

China’s total oil production reached 4.0 bbl/d in 2008, similar to production in 2007. China’s largest and oldest oil fields are located in the northeast region of the country. CNPC’s Daqing field produced about 801,000 bbl/d of crude oil in 2008, according to FACTS Global Energy’s most recent estimate. Sinopec’s Shengli oil field produced about 553,000 bbl/d of crude oil during 2008, making it China’s second-largest oil field. However, Daqing, Shengli, and other ageing fields have been heavily tapped since the 1960s, and are expected to decline significantly in output in the coming years. Recent exploration and production (E&P) activity has focused on the offshore areas of Bohai Bay and the South China Sea as well as onshore oil and natural gas fields in western interior provinces such as Xinjiang, Sichuan, Gansu, and Inner Mongolia (see the South China Sea Report for more information).

Roughly 85 percent of Chinese oil production capacity is located onshore. Although offshore E&P activities have increased substantially in recent years, China’s interior provinces, particularly in the northwest’s Xinjiang Province, have also received significant attention. The onshore Junggar, Turpan-Hami, and Ordos Basins have all been the site of increasing E&P work, although the Tarim Basin in northwestern China’s Xinjiang Uygur Autonomous Region has been the main focus of new onshore oil prospects. Reserve estimates for Tarim vary widely, with IHS Energy reporting that some estimates are as high as 78 billion barrels of total in-place oil reserves. The basin is home to Sinopec’s Tahe oil field, with an estimated 996 million tons of in-place oil and gas reserves after a recent addition of 135 million tons in 2008. Since 2005, hydrocarbon production from Tarim has doubled, and the NOCs are taking advantage of tax breaks and other incentives to develop the region and offset declines in mature basins. CNPC signed production sharing contracts (PSCs) in 2007 with foreign firms to co-develop the Liangjing and Jilin blocks in the sizeable Songliao basin in the northeast.

China’s NOCs are also investing significantly in technologies to increase oil recovery rates at the country’s mature oil fields. Increasingly, CNPC is utilizing natural gas supplies from the Daqing field for reinjection purposes to fuel enhanced oil recovery (EOR) projects. CNPC hopes that EOR techniques can help stabilize Daqing’s oil output in the years ahead. However, China’s domestic demand for natural gas supplies is also increasing, which may put a competing claim on natural gas output from Daqing.

About 15 percent of overall Chinese oil production is from offshore reserves, and most of China’s net oil production growth will likely come from offshore fields. According to the IEA, current offshore production is 680,000 bbl/d, and is expected to rise to 980,000 bbl/d by 2014. These volumes will offset some of the declines from the more mature onshore fields in eastern China.

Offshore E&P activities have focused on the Bohai Bay region, Pearl River Delta, South China Sea, and, to a lesser extent, the East China Sea. The Bohai Bay Basin, located in northeastern China offshore from Beijing, is the oldest oil-producing offshore zone and holds the bulk of proven offshore reserves in China. In May 2007, PetroChina announced a reserve assessment of its newest oil field in Bohai Bay, which the company claims could be the largest oil find in three decades once a final reserve estimate is made. The Nanpu field holds proven oil reserves of 3.7 billion barrels, with probable and possible reserves much higher. PetroChina initiated phase one development of the Nanpu field in June 2007, and hopes to bring 200,000 bbl/d of crude oil production onstream by 2012. Peak output of 500,000 bbl/d is expected to be reached as part of a second phase development plan, which would make Nanpu the third-largest oil field in China after Daqing and Shengli.

Even before the Nanpu discovery was logged, offshore areas were expected to account for much of China’s growth in oil production. CNOOC made 8 new discoveries in offshore reserves, increasing the company’s proven oil reserves to 1.6 billion barrels. CNOOC intends to double oil production in the Bohai Bay where over half of the NOC’s production is expected to originate by 2015. ConocoPhillips, the largest foreign company acreage holder in the Bohai Bay, is expanding production at the company’s Peng Lai field, China’s largest producing offshore field. The company expects to siphon a total 170,000 bbl/d from Peng Lai by 2010, up from 45,000 bbl/d currently. ConocoPhillips and CNOOC aim to complete Phase II of the field development which includes 5 platforms by May 2010. CNOOC brought one block in the company’s Bozhong oil field online in March 2009 pumping 4,000 bbl/d. Total production from the Bozhong fields is expected to reach 25,000 bbl/d in 2011.

In 2007, CNOOC’s production totaled 372 bbl/d with about 37 percent coming from the South China Sea developments. CNOOC, ConocoPhillips, and Devon Energy are developing the Panyu oilfields with output peaking at 60,000 bbl/d. In 2008, CNOOC, along with its partner Husky Energy of Canada, commenced commercial production at the Wenchang oil fields at an initial rate of 14,000 bbl/d. Wen 19-1 is expected to produce nearly 19,000 bbl/d with other platforms under development. CNOOC also brought on the Xijiang 23-1 field onstream in 2008, which is expected to produce 40,000 bbl/d of crude oil.

Whereas onshore oil production in China is mostly limited to CNPC and CNOOC, the two major upstream NOCs, international oil companies have been granted much more access to offshore oil prospects mainly through PSC agreements. Aside from ConocoPhillips, other foreign oil majors involved in offshore E&P work in China include: Shell, Chevron, BP, Husky, Anadarko, and Eni, among others. These IOCs leverage their technical expertise in order to partner with a Chinese NOC and make a foray into the Chinese markets. In 2009, CNOOC offered 17 blocks in the deepwater offshore parts of the South China Sea to encourage more exploration in these more technically challenging areas.

CNOOC is also involved in exploration activities in the East China Sea, although territorial disputes with its neighbors have so far limited large-scale development of fields in the region. China and Japan’s Exclusive Economic Zones (EEZs) overlap in parts of the East China Sea that are believed to hold hydrocarbon reserves. The two countries have held negotiations over the past couple years in hopes of resolving the disputes, and in June 2008, the two countries reached an agreement to jointly develop the Chunxiao/Shirakaba and Longjing/Asurao fields. The agreement stipulated that the investors would share profits and risks equally. However, in early 2009, the agreement unraveled when China asserted sovereignty over the fields following Japanese disputes of actual E&P work at the fields. (See East China Sea brief for more details.)

China claims ownership of a portion of the potentially hydrocarbon rich Spratly Islands in the South China Sea, as do the Philippines, Malaysia, Taiwan, and Vietnam. In June 2007, BP abandoned plans to conduct exploration activities near the Spratly Islands, citing ongoing uncertainty over competing ownership claims between China and Vietnam. Also, as a result of the Philippines’ passing a legislative bill claiming the islands, China has protested. The Paracel Islands, which China first occupied in 1974, are also claimed by Vietnam (see the Vietnam Country Analysis Brief and the South China Sea brief for more details.)

With China's expectation of growing future dependence on oil imports, Chinese NOCs have sought interests in E&P projects overseas. CNPC has been the most active company, while Sinopec, CNOOC, and other smaller NOCs have also expanded their overseas investment profile. China is taking advantage of the economic downturn and lower asset values to step up its global acquisitions and financing of projects in upstream, midstream, and downstream sectors. One of the financing strategies this year to secure long-term deals is China’s bilateral loan-for-oil deals with several countries. These loans amount to about $50 billion or 70 percent of the total investments by the 3 major NOCs since 2008 according to industry sources. While several resource-rich countries have been strapped for cash during the credit crunch of 2008-09, China can use its vast foreign exchange reserves, estimated at $2 trillion, to help leverage such investments. China finalized loan for oil deals recently with Russia, Brazil, Venezuela, Kazakhstan, Ecuador and reportedly agreed to a loan of $3 billion to Turkmenistan to assist in developing the South Iolotan gas field project to feed the Central Asia Gas Pipeline. China agreed to loan Russian companies, Rosneft and Transneft $25 billlion to finance the East Siberia Pacific Ocean oil pipeline in exchange for 300,000 bbl/d of oil shipments. The Chinese Development Bank (CDB) also agreed to loan Petrobras of Brazil $10 billion so that Sinopec can access 200,000 bbl/d of oil for export to China. The loan to Venezuela stands at $4 billion to finance various projects increasing oil exports to China almost three-fold to 1 million bbl/d by 2015. CNPC and the China Export-Import Bank intend to lend Kazakhstan $5 billion each in two loans allowing CNPC a much larger role in the upstream oil development in the Central Asian country, following the company’s acquisition of PetroKazakhstan in 2005.

China’s overseas equity oil production grew from 760,000 bbl/d in 2007 to 820,000 bbl/d in 2008. Overseas equity production represented roughly 29 percent of China’s total oil production in 2008. According to PFC Energy, CNPC is the Chinese NOC investor in other countries and held international assets in 29 countries by the end of 2008. The NOC also held 602,000 bbl/d in 2007, about 80 percent of total Chinese overseas equity production. As China expands its refining capacity to accept sour and high-sulfur crude oil, Chinese NOCs are looking to invest in more Middle Eastern fields such as in Iran, Iraq, and Syria and in Latin America. CNPC and Sinopec recently signed contracts with Iran to develop the North Azadegan and Yadavaran oil fields, and CNPC won a bid to develop the Rumalia oil field, one of the largest, in Iraq in July 2009.

The Middle East remains the largest source of China’s oil imports, although African countries also contribute a significant amount to China’s oil imports. According to FACTS Global Energy, China imported 3.6 million bbl/d of crude oil in 2008, of which approximately 1.8 million bbl/d (50 percent) came from the Middle East, 1.1 million bbl/d (30 percent) from Africa, 101,000 bbl/d (3 percent) from the Asia-Pacific region, and 603,000 bbl/d (17 percent) came from other countries. A similar pattern is evident in import data from the first five months of 2009 (see the pie charts below for greater detail). In 2008, Saudi Arabia and Angola were China’s two largest sources of oil imports, together accounting for over one-third of China’s total crude oil imports (see the Saudi Arabia and Angola Country Analysis Briefs for more information). China exported about 75,000 bbl/d of crude oil in 2008. China imported approximately 0.8 million bbl/d and exported 0.3 million bbl/d of key petroleum products including LPG, gasoline, diesel, jet fuel, fuel oil, and lubricants in 2008.

China has actively sought to improve the integration of the country’s domestic oil pipeline network as well as to establish international oil pipeline connections with neighboring countries to diversify oil import routes. In March 2007, CNPC spearheaded the Beijing Oil & Gas Pipeline Control Center that monitors all long-distance pipelines and perform data collection for enhanced efficiency on the system.

According to the CNPC, China has about 11,245 miles of total crude oil pipelines (69 percent managed by CNPC) and nearly 3,000 miles of oil products pipelines in its domestic network. Total oil liquids and natural gas pipeline is increasing at about 6 percent per year. At present, the bulk of China’s oil pipeline infrastructure serves the more industrialized coastal markets. However, several long-distance pipeline links have been built or are under construction to deliver oil supplies from newer oil-producing regions or from downstream centers to more remote markets. In October 2006, the Western China Refined Oil Pipeline started operations. The 1,150-mile link will deliver petroleum products from Urumqi in Xinjiang Province to Lanzhou in Gansu Province. Gradually, this pipeline will connect with other regional spurs to deliver supplies to the eastern coast, as well as accommodate additional oil imports from Kazakhstan. Previously, most oil supplies from Xinjiang were delivered by rail. In addition, the Western Pipeline consists of a crude oil line traversing from Xinjiang to the Lanzhou refinery and which came online in 2007.

One of the largest domestic pipelines under development is PetroChina’s planned Zhengzhou-Urumqi crude oil pipeline, which would traverse more than 1,600 miles and have a transport capacity of 300,000 bbl/d. Commissioning of the entire pipeline is expected by 2010. PetroChina also has plans to build at least two additional spurs from Zhengzhou, located in the populous Henan Province, which would help deliver crude oil supplies eastward. One is the Zhengzhou-Jinzhou pipeline, which would deliver oil northeastward to Hubei Province. The other is the Zhengzhou-Changsha link, which would terminate in Hunan Province near the industrial southeast. Parts of these links came online in 2009, and altogether will form the country’s largest oil product pipeline network.

China inaugurated its first transnational oil pipeline in May 2006 when it began receiving Kazakh and Russian oil from a pipeline originating in Kazakhstan. The new 200,000 bbl/d pipeline spans 620 miles, connecting Atasu in northern Kazakhstan with Alashankou on the Chinese border in Xinjiang. The pipeline was developed by the Sino-Kazakh Pipeline Company, a joint venture between CNPC and Kazakhstan’s KazMunaiGaz (KMG). The pipeline’s third leg from Kenkiyak to Atasu and an expansion of the entire pipeline, doubling capacity to 400,000 bbl/d, are to be completed in 2011 by CNPC. Due to financial problems resulting from the recent economic crisis, KMG signed a deal allowing CNPC equity in the upstream oil in return for loans financing several downstream infrastructure projects, including the Kenkiyak to Atasu section. Industry publications suggest that the Atasu to Alashankou line has been running at about 50 percent of capacity, or slightly over 100,000 bbl/d. The new pipeline from would also connect with Russian crude from western Siberia.

Russia’s Far East will soon be a source for Chinese crude oil imports. Russian state-owned oil giant Transneft began construction in April 2006 on a pipeline that will span 2,972 miles from the Russian city of Taishet to the Pacific Coast (see Russia Country Analysis Brief). Known as the Eastern Siberia-Pacific Ocean Pipeline (ESPO), the project will be completed in two stages. The first stage of the project includes the construction of a 600,000 bbl/d pipeline from Taishet to Skovorodino. CNPC signed an oil-for-loans agreement with Russian companies Rosneft and Transneft for $25 million and $15 million, respectively, in early 2009 and entails China financing the 43-mile pipeline spur to run from ESPO to the Chinese border in exchange for crude oil deliveries. The first phase of ESPO is expected to be completed in December 2009 and deliver 300,000 bbl/d to the Chinese border beginning in 2011 for 20 years. Furthermore, CNPC intends to build a 597-mile pipeline linking the spur with the Daqing oil field in the northeast. In the future, a second phase will extend the pipeline from Skovorodino to Kozmino Bay on the Pacific Coast, which is expected to accommodate Russian crude oil exports to both China and Japan. However, the second phase of the ESPO is not likely to be commissioned until 2015 or thereafter.

China has also revived its plans to construct an oil import pipeline from Myanmar through an agreement signed in March 2009. As Myanmar is not a significant oil producer, the pipeline is envisioned as an alternative transport route for crude oil from the Middle East and Africa that would bypass the potential choke point of the Strait of Malacca (see the World Oil Transit Choke Points Brief for more information). The $2.9 billion project will include parallel oil and gas pipelines, and stakeholders include CNPC and Myanmar Oil and Gas Enterprises. There has been no final agreement on the capacity of the pipeline, though the initial target is around 150,000, and construction should be underway in 2009.

China had 6.4 million bbl/d of crude oil refining capacity at 53 facilities as of January 2009, according to OGJ. Other sources report higher refinery capacity at end-2008. The NEA’s goal is to raise refining capacity to 8.8 million bbl/d by 2011. According to the BP Statistical Review of World Energy, refinery utilization in China increased from 67 percent in 1998 to 89 percent in 2008.

Sinopec and CNPC are the two dominant players in China’s oil refining sector, accounting for 50 percent and 35 percent of the capacity, respectively. However, CNOOC entered the downstream arena and commissioned the company’s first refinery, the 240,000 bbl/d Huizhou plant, in March 2009 in order to process the high-sulfur crudes from its Bohai Bay fields. Sinochem has also proposed a number of new refineries, and national oil companies from Kuwait, Saudi Arabia, Russia, and Venezuela have also entered into joint-ventures with Chinese companies to build new refining facilities. Sinopec and PetroChina plan to commission about 450,000 bbl/d and 400,000 bbl/d, respectively, of expansion and greenfield capacity by 2011 according to industry sources. In light of the recent economic downturn, some firms have postponed launching refinery projects until product demand picks up again. Also, the NDRC outlined in May 2009 that it plans to eliminate refineries of 20 kbbl/d with inefficient equipment and ban any new projects in efforts to encourage economies of scale and energy efficiency measures. In addition, PetroChina (CNPC) is recently branching out to acquire refinery stakes in other countries in efforts to move downstream and secure more global trading and arbitrage opportunities. The company recently purchased a 45.5 percent stake in Singapore Petroleum for $1 billion, and received approval to purchase 49 percent of Nippon Oil’s Osaka refinery in Japan in June 2009.

The expansive refining sector has undergone modernization and consolidation in recent years, with dozens of small refineries (teapots), accounting for about 20 percent of total fuel output, shut down and larger refineries expanding and upgrading their existing systems. Domestic price regulations for finished petroleum products have hurt Chinese refiners, particularly smaller ones, because of the large gulf between international oil prices and China’s relatively low domestic rates. In 2008, Sinopec and CNPC (PetroChina) reportedly had refining losses of nearly $29 billion before the Chinese government provided direct subsidies to partially cover the losses.

Planned New Refinery Projects and Upgrades in China
Owner	Location	Capacity	Planned start-date	Notes
Sinopec	Fujian	160,000	Mid-2009	Upgrade, developed with Aramco and ExxonMobil
	Tianjin	200,000	11/2009	Upgrade
	Maoming	130,000	2010	Upgrade, construction begins late 2009
	Guangdong	300,000	2010	Environmental denied, developing with Kuwait Petroleum
	Zhenhai/Zhejiang	300,000	-	Expansion
CNPC/PetroChina	Dushanzi	80,000	2009Q3	Upgrade
	Qinzhou/ Guangxi	200,000	2010	New construction, on hold
	Tianjin	200,000	2012	Feasibility stage; JV with Rosneft
	Guangdong/ Jieyang	400,000	-	New construction; developed with PDVSA
	Lanzhou	110,000	End 2009	Expansion
	Henan	200,000	-	Feasibility study begun June 2009
	Changzhou	200,000	2015	Feasibility study
	Liaoyang	110,000	-	Expansion, approval pending
	Jilin	110,000	2010	Expansion
CNOOC	Huizhou	200,000	May 2010	Expansion
Sinochem	Quanzhou	100,000	2011	Preliminary approval
	Ningbo	240,000	2011	Pending approval
Sources: Global Insight and FACTS Global Energy

As China diversifies its crude oil import sources and expands oil production domestically, state-owned refiners will have to adjust to the changing crude slate. Traditionally, many of China’s refineries were built to handle relatively light and sweet crude oils, such as Daqing and other domestic sources. In recent years, refiners have built or upgraded facilities to support greater Middle Eastern crude oil imports, which tend to be heavy and sour. However, more recently, China’s refiners have also had to prepare for high-acid and high-sulfur crude oil streams. Much of the country’s planned new oil production in the offshore Bohai Bay is considered high-acid, and China is the largest importer of Sudan’s Dar Blend, a high-acid crude (see the Sudan Country Analysis Brief for more information). High-acid crude oil tends to be light and sweet, but refiners must install stainless steel metallurgy or utilize other advanced processes to successfully run the crude streams.

China has used stockpiling through its SPR and commercial storage as one strategy in recent years to ensure oil reserves, and this could increase China’s need for imported oil in the future. In China’s 10th 5-Year Plan (2000-2005), launched in 2001, Chinese officials decided to establish a government-administered strategic oil reserve program to help shield China from potential oil supply disruptions. This system will be built in three stages, and, in 2004, China started construction at four sites that would comprise the first phase of the country’s nascent strategic oil reserve program. Phase 1 has a total storage capacity of 103 million barrels at four sites, and was completed in early 2009. Phase 1 storage capacity will amount to approximately 25 days of net oil imports based on 2008 estimates of Chinese oil demand. Phase 1 sites include: Zhenhai in Zhejiang Province (planned capacity 32 million barrels); Aoshan, also in Zhejiang Province (31 million barrels); Huangdao in Shandong Province (20 million barrels); and Dalian in Liaoning Province (19 million barrels). Thereafter, Phase 2, already under construction, is expected to increase capacity to almost 270 million barrels by 2011. Ultimately, Phase 3 is expected to bring total strategic oil reserve capacity in China to about 500 million barrels, although there is no timetable set for this plan.

The government ceased filling the SPR in 2007 because of mounting crude oil prices, though, between September 2008 and March 2009 when prices descended, the government injected about 60 million bbl (more than 300 kbbl/d). The average cost of Phase I SPR storage was $58/bbl.

In addition to the SPR, China has approximately 300 million barrels of commercial crude oil storage capacity according to some industry sources, though this number cannot be verified. Also, the government reported that it plans to create a strategic refined oil stockpile to be operated by a subsidiary of NDRC and aims to boost stocks to 80 million barrels by 2011. In addition, China plans to increase commercial oil product storage to 252 million barrels by 2013. Details of these plans are still under development.