South China's Guangdong Province is in discussions with the central government over a proposal to build strategic oil reserve bases in the region.

The tanks will be built in Zhanjiang and Huizhou, Huang Huahua, the governor of the southern province, said yesterday on the sidelines of the fifth session of the 10th National People's Congress.

China decided in 2003 to build strategic oil reserves to curb possible future shortages.

Phase one of the project, to be completed in 2008, includes four strategic oil stockpiles with a total capacity of 16.2 million cubic meters.

They are located in Zhenhai and Zhoushan in Zhejiang Province, Huangdao in Shandong Province, and Dalian in Liaoning Province.

Phase two of the project calls for more bases that will store 28 million tons of oil.

Possible sites include: Hainan Island, cities in Guangdong Province and Gansu Province.

Wei Liucheng, Communist Party chief of China's southernmost province of Hainan, said the island also wants to build an oil reserve base for either strategic or commercial use.

Declining to give more details, Wei said the provincial government was negotiating with international petroleum syndicates.

"Hainan boasts distinctive advantages for building both national strategic oil reserve base and commercial oil reserve base," he said.

China imported 47 percent of its oil last year.

Ma Kai, minister of the National Development and Reform Commission, said yesterday the country had been actively establishing oil reserves to ensure national energy and economic security.

The nation's oil imports in January rose 3.5 percent to a record 13.7 million metric tons (3.2 million barrels a day), the General Administration of Customs said last month.

In addition to fulfilling its oil reserve plans, the Guangdong governor also revealed yesterday that the province would strictly monitor the province's big energy enterprises to restrict their waste discharge.

New measures include satellite surveillance of industrial areas, and prosecuting firms that breach pollution laws.

Habitual offenders will be blacklisted and named by the government.

The governor said the province's major thermal power plants would be equipped with desulfurizing filters this year to reduce air pollution.

The southern province, one of the country's biggest energy consumers, maintains the lowest level nationwide of energy consumption rate per unit GDP value, Huang said.

(China Daily 03/08/2007 page6)