Joint measures planned to bolster nation's strategic crude oil reserves

China's National Energy Administration and the US Department of Energy inked an agreement on Thursday that will see the two sides work together to bolster China's strategic crude reserves.

Wu Xinxiong, head of the NEA, and Ernest Moniz, US secretary of energy, signed the memorandum of understanding and discussed cooperation opportunities in sectors like shale gas, liquefied natural gas trading, nuclear projects and non-fossil energy.

"China and the United States have many cooperation opportunities in the energy sector, which is significant for both countries," Wu said. He said the two sides should further expand energy cooperation.

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Moniz said efforts should be made to strengthen cooperation and find solutions for existing problems through China-US strategic and economic dialogues.

As China's economy grows, the country's crude oil demand has been increasing rapidly with an estimated annual growth of 6.7 percent during the last 10 years.

In 2013, China used 487 million metric tons of crude, up 2.8 percent year-on-year. Up to 58.1 percent of the supply came from imports, according to the CNPC Economics and Technology Research Institute.

According to experts, creating an oil storage system is crucial for China's energy security, especially when weighed against the growing demand and rising dependency on foreign supplies.

According to the institute, by the end of 2013, China had established 24 crude oil storage bases with total capacity of 46.23 million cubic meters for commercial use.

Earlier reports indicated that the US was keen to be a part of China's crude reserve system development as it felt it would help stabilize the international crude market.

The agreement gave further evidence that the two nations were keen on stepping up energy cooperation.

According to a report released on April 10 by the US Energy Information Administration, crude oil reserves in the US reached their highest level since 1976 in 2013. Proven crude reserves in the US rose for the fourth consecutive year in 2012 to 33 billion barrels, a 15 percent year-on-year growth.

"The cooperation between China and the US on crude reserves will help balance the energy output and consumption to some extent," said Wang Haohao, an analyst with energy consultancy Shandong Longzhong Information Technology Co.

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