China’s Sinopec opened a new 16-million-barrel commercial crude storage base in southern China’s Hainan province last week, receiving a first crude shipment of 100,000 tonnes, or roughly 5 percent of its tank space, the state energy group said.

The start-up of the Sinopec tank farm came amid market talk that Chinese oil refiners may be taking advantage of low global oil markets to stock up.

Sinopec’s Yangpu base has about 16 million barrels of storage capacity, with 25 100,000 cubic metre crude tanks and one 50,000 cubic-metre tank, the company said in a report carried on www.sinopecnews.com.cn.

China’s total commercial crude stocks inched down 0.7 percent in October over September, reversing a three-month gain, China OGP, an oil and gas newsletter run by official Xinhua news agency, reported earlier on Tuesday.

In absolute volumes, the inventory by end-October would be 35.4 million tonnes, or 258 million barrels, according to Reuters calculations, roughly just under four weeks of Chinese consumption.

Construction of the Hainan base, which cost 2.33 billion yuan ($379 million), began in January 2013 and was completed in September, Sinopec said.

The facility is connected via pipeline to subsidiary Sinopec Corp’s refinery, the 160,000-barrels-per-day Hainan plant, about 40 kilometres (25 miles) away.

China made its first official announcement about the country’s strategic petroleum reserve (SPR) last week, saying the first phase of the government emergency stockpile is storing about 91 million barrels of crude oil, or about nine days of oil use. The announcement did mention its phase-two reserves which have been partially filled.

Source: Reuters (Reporting by Chen Aizhu; Editing by Richard Pullin)