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Analysis: China's fuel oil reserves

disclaimer: image is for illustration purposes only
by Andrei Chang
Hong Kong (UPI) Dec 21, 2007
North Korea no longer has the capability to initiate a large-scale invasion of South Korea; in fact it lost this ability in the mid-1990s. This assessment is based on the calculation of the fuel oil the mechanized battle groups of the North Korean People's Army would need to launch an invasion and the actual oil inventory of the country.

Using similar calculations, one can analyze how long Taiwan's forces could survive an attack from China, and how long China's PLA forces could sustain an assault on Taiwan. On the Chinese side, it means assessing how much fuel oil would be required for the navy, air force and mechanized amphibious combat units to engage in large-scale cross-strait landing assault operations.

China made the decision in 2004 to build four large strategic oil reserve bases in three southeastern provinces: Zhenhai Base in Zhejiang province, Luanshan Base on Zhoushan Island of the same province, Huangdao Base in Qingdao, Shandong province, and Dayawan Base in Guangdong province. According to plan, initial reserves of 10 million cubic meters of crude oil were expected to be accumulated by 2010.

Before this goal is reached, China's strategic fuel reserves remain fragile. In addition, all of these strategic oil reserve bases are built in coastal provinces, mainly because they must rely on imported oil. If the bases were built further inland the cost of transporting the oil would be very high.

The locations of these reserve bases make them very vulnerable should a conflict break out in the Taiwan Strait. Among the four bases, all except the Huangdao Base in Shandong are within striking range of Taiwan's cruise missiles and combat aircraft.

China has a three-phase plan for building up its fuel resources: In the first phase oil reserves are expected to reach 10 million to 12 million tons, the second phase will add 28 million tons, and the third phase another 28 million tons. Ten million tons of oil is equivalent to China's 30-day domestic demand, but this does not include consumption by the armed forces.

Luanshan Base in Zhejiang province was originally a commercial oil transfer base with a total reserve capacity of 1.58 million cubic meters. About half of its planned initial 10 million cubic meters of capacity, that is 5 million cubic meters, is required for the construction of facilities at this base.

Zhenhai base is expected to have a capacity of 5.2 million cubic meters, equivalent to 32.7 million barrels of crude oil. China currently consumes an average of 7 million barrels of crude oil every day. Based on this calculation, even if this base were put to full use, it could only supply 4.6 days of the national demand.

At present, 52 very large oil tanks have been built at the base. Taiwanese forces could attack these huge targets by launching Hsiung Feng 2E cruise missiles, or firing laser-guided bombs and TV-guided missiles from F-16 fighter aircraft.

The construction plan for the Huangdao Base includes 32 tanks, each of which is expected to have a capacity of 100,000 cubic meters. The second phase of the project at this base is supposed to be completed within this year.

Although construction has been completed on some of the strategic oil reserve facilities, the facilities have not played the role of reserve bases because of the soaring price of oil in the last few years. Most of them have been virtually empty. It was not until around October 2006 that the Zhenhai Base received 3 million barrels of crude oil from Russia.

According to the latest information, China has only a 20-day supply of crude oil reserves, or approximately 7 million tons. This refers only to domestic peacetime fuel demand.

Nonetheless, there are multiple indications that since 2003 China has been making preparations to reserve enough fuel to support a certain scale of military conflict. In that year China's crude oil imports increased by 41 percent. Since that time, China has been working toward setting aside enough fuel to sustain a large-scale assault operation.

(Andrei Chang is editor in chief of Kanwa Defense Review Monthly, registered in Toronto.)

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