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China expands offshore storage facilities to boost oil reserves at significantly lower costs

Increasing international geopolitical and economic uncertainties compel the NPC to increase its storage capacity and purchase reserves while prices are low.
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Disclaimer: An online translation service was used in the production of the current editorial piece.

The representative of the National People’s Congress and the former party committee secretary and chairman of China State Shipbuilding Corporation (CSSC) has proposed to “speed up the construction of offshore floating oil storage bases and improve China’s oil reserve capacity”.

Liu Zheng made the statement at the recently held CSSC-organised Maritime Watch conference, according to a China Shipbuilding News report published by CSSC on Tuesday (26 May).

In his address, Liu explained that current international oil market trends provide a rare opportunity for China to boost its crude oil reserves.

In recent years, China’s dependence on imported crude oil has increased year on year, reaching 72% in 2019, he said.

As there are increasing risks in global geopolitics, uncertain economies and the threat of natural disasters, the need for China to increase oil reserves is more urgent than ever. 

Significant progress has already been made in the development of China’s oil reserves, but there is still a considerable gap between reserves available and economic demand. 

According to the International Energy Agency’s recommendations, a country’s oil reserves should store at least 90 days of consumption.

In 2019, China’s crude oil imports were 506 million tonnes (Mt), of which 505 Mt were net imports. 

Based on the IEA’s recommendation, in order to reach the 90-day ‘safety line’, China’s oil reserves must reach at least 125 Mt. 

In terms of actual reserves, China’s oil reserves are currently around 40 Mt, which falls short of the safety reserve requirement. 

Liu said China has completed the construction of the first phase of the oil reserve, and the second phase of the project is expected to be completed in 2020. 

However, even with this oil reserve, China’s oil reserve will not exceed 70 Mt, and the reserves still fall short of 50 Mt to reach the safety base line.

Offshore floating oil storage is an ideal solution for China to accelerate the construction of its oil storage capacity as it can be built quickly at relatively low costs, is highly resistant to earthquakes, provides ease in terms of delivery and offloading, and saves on land as a resource, he added.

In his address, Liu provided the following details in support of his proposal:

  • Construction time frame: With a second-hand super-large oil tanker (VLCC) for oil storage the facility can be achieved in a short time. Even a new-build VLCC can be built in 14 months, which is much faster than building an onshore storage facility.
  • Construction costs: Current construction costs of hardware to build offshore storage is 40% lower than its historical high and does not require the acquisition of land.
  • Safety concerns: Floating oil storage can avoid geological instabilities such as earthquakes. It is also at a safe distance from cities and residential zones which reduces its threat to society.
  • Timing and opportunity: 
    • Due to market forces, political factors, and the COVID-19 pandemic, international oil prices have plummeted to USD 30 per barrel.
    • These uncertainties make it difficult to forecast future prices, but it is generally agreed that due to the shrinkage in the global demand for crude oil, it will be difficult for oil prices to break through USD 40 per barrel in a significant way for the rest of 2020. 
    • However, in the medium and long term, oil prices will not deviate from its true value and international oil prices will increase in the future.
    • After 2021, we expect oil prices to exceed USD 50 per barrel.
    • So for example, if we take a VLCC that can store 2 million barrels of crude oil, and we take into account USD 20 in price difference per barrel, establishing a VLCC floating storage right now could save China’s oil reserves USD 42 million. 

Liu concluded current market forces would reduce the overall costs of purchasing and storing oil reserves  for Chinna and would provide a solid foundation to guarantee energy reserves for any future economic development. 


Photo credit: China State Shipbuilding Corporation
Published: 27 May, 2020

 

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Biofuel

BHP and GCMD trial multi-feedstock B100 bio bunker fuel on bulk carrier

Bio-blend in the BHP and GCMD pilot is being used on a BHP-chartered bulk carrier “Berge Lyngor”, which was bunkered in Singapore in early May.

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BHP and GCMD trial multi-feedstock B100 bio bunker fuel on bulk carrier

BHP and the Global Centre for Maritime Decarbonisation (GCMD) on Wednesday (3 June) said they have blended biofuels from two distinct feedstocks—used cooking oil and waste animal fats —and introduced the lower-emissions marine fuel into a BHP-chartered bulk carrier as part of a pilot project.

The bio-blend in the BHP and GCMD pilot is being used on a BHP-chartered bulk carrier Berge Lyngor, owned and operated by Berge Bulk, transporting BHP iron ore from Western Australia to China. When run on bio-blend, the vessel has the potential to reduce well-to-wake greenhouse gas emissions by approximately 79 per cent per voyage compared to sailing on very low sulphur fuel oil (VLSFO).

The vessel bunkered in Singapore in early May with a B100 bio-blend comprising 50 percent tallow-derived biodiesel, sourced and supplied by HAMR Energy, and 50 per cent used cooking oil (UCOME) supplied by Mitsui & Co Energy Trading Singapore (METS).

Mitsui also blended the fuel and Dan-Bunkering coordinated and executed the bunkering operation, which was performed by Global Energy’s barge MT Maple.

The BHP and GCMD pilot will assess how biofuels from multiple feedstocks can be blended, handled, and introduced under real-world operating conditions using existing used cooking oil bunkering infrastructure.

At the same time, insights from this pilot will help identify solutions to challenges related to fuel quality, handling, traceability, and onboard vessel performance.

Biofuels for global shipping today rely heavily on used cooking oil – a feedstock whose availability is approaching its projected limits. Biofuel from waste animal fats presents a promising option to expand the supply of lower-emissions marine fuels.

The outcomes of the pilot are expected to shed light on the practical steps to integrate biofuel blends from different feedstocks into existing supply chains. The diversity of biofuels will provide shipowners and operators with greater flexibility to optimise fuel procurement based on cost, availability, and lifecycle emissions performance.

Biofuels derived from different feedstocks can exhibit varying properties that may impact operations, including potential corrosion from oxidation, fuel system clogging caused by wax formation, which this pilot aims to assess.

The pilot will trace and verify the biofuel blend’s integrity aimed at bolstering confidence in emissions reductions reporting. The pilot will also provide insights into how robust tracing can support future marine fuel supply chains where biofuels from multiple feedstocks with varying lifecycle greenhouse gas emissions footprints are blended together.

This project is co-funded by the Maritime and Port Authority of Singapore under the Maritime Innovation and Technology Fund (MINT).

 

Photo credit: Global Centre for Maritime Decarbonisation
Published: 3 June, 2026

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Biofuel

NYK starts one-year B100 bio bunker fuel trial on car carrier

In this trial, NYK will operate a car carrier continuously on B100 for one year to evaluate the impact on engines, fuel supply systems, and operational practices.
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June 3, 2026

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NYK starts one-year B100 bio bunker fuel trial on car carrier

Japanese shipping firm NYK on Tuesday (2 June) said it has commenced a one-year long-term trial involving the continuous use of 100% biofuel (B100) on an NYK-operated car carrier. 

In this trial, NYK will operate a car carrier continuously on B100 for one year to evaluate the impact on engines, fuel supply systems, and operational practices. High-purity biofuels such as B100 are known to be susceptible to degradation from oxygen, light, and heat, raising concerns about the stability of such fuels during long-term use.

In this trial, the biofuel primarily comprises FAME (Fatty Acid Methyl Ester) derived from used cooking oil and similar feedstocks.

The initiative is designed to evaluate the fuel’s effects on the vessel’s equipment and verify operational safety under real-world conditions. 

Through this effort, NYK seeks to accumulate technical expertise that will support the broader use of high-purity biofuels and further accelerate efforts to reduce greenhouse gas (GHG) emissions.

NYK has been advancing the use of biofuels through various initiatives. In 2024, the company conducted a trial using biofuel blend B24 and subsequently expanded practical usage to B30. However, the company said there remains limited global experience with the long-term continuous use of B100.

“By collecting long-term operational data through this trial, NYK aims to accumulate valuable technical insights to support both the safe operation of vessels and the wider adoption of high-purity biofuels,” it said. 

 

Photo credit: NYK
Published: 3 June, 2026

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Ammonia

AM Green plans to build green ammonia plant at Indian port

Initiative also includes development of green ammonia handling, storage and bunkering infrastructure, pilot bunkering operations, safety procedures and training programmes, says VOC Port Authority.

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June 3, 2026

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VO Chidambaranar (VOC) Port Authority on Friday (29 May) said it has signed a Memorandum of Understanding (MoU) with India’s ammonia producer AM Green Ammonia to collaborate in the development of a green ammonia production plant.

The plant will have a capacity of one million tonnes per annum (MTPA) at Tuticorin.

The initiative also includes development of green ammonia handling, storage and bunkering infrastructure, pilot bunkering operations, safety procedures and training programmes. 

The project is expected to support the development of green fuel corridors connecting VOC Port with major ports in Europe and Asia, thereby strengthening India’s position in the global green fuels value chain.

VOC Port also signed a Memorandum of Understanding (MoU) with Bureau Veritas (India) Pvt. Ltd., to collaborate on Green Port certification, emissions accounting, ESG reporting, safety validation, development of green bunkering practices, and establishment of a Centre of Excellence for green fuels and sustainability.

The port also plans for an upcoming 750 m³ green methanol bunkering facility.

 

Photo credit: Naveed Ahmed on Unsplash
Published: 3 June, 2026

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