CHINA TO STAGGER STRATEGIC OIL RESERVE PURCHASES

High global prices have prompted China to stagger oil purchases for its strategic reserves, which are unlikely to exceed the equivalent of one month's imports by 2010, said Beijing's energy chief.

Beijing did not want to invest heavily when oil was expensive, especially as aggressive stockpiling by the fastest-growing main economy could affect international markets, said Chen Deming, a vice-chairman of the National Development and Reform Commission, the economic planning agency.

"By the year 2010, China's oil reserves will be equivalent to about 30 days of imports," Mr Chen told the Boao Forum for Asia in Hainan province. "We won't increase the stockpile overnight as a large increase would impact global prices."

The projection was conservative and based on a personal estimate, he said. Under International Energy Agency guidelines, countries should keep strategic reserves equivalent to 90 days' worth of imports.

Mr Chen, who took charge of energy policy last year, also indicated China would continue to treat nuclear power as a "supplemental" energy source, given the difficulties it faces in securing adequate uranium supplies.

Limited global supplies of the nuclear feedstock have inspired suggestions that Beijing should also establish a stand-by uranium reserve.

China aims to have 60 gigawatts in nuclear capacity �C less than the capacity it adds each year in new coal-fired power stations.

To fuel an economy that grew more than 11 per cent in the first quarter, China will have to import at least 185m tonnes of crude oil this year, or just under half of its total requirement.

China's increasing dependence on imported oil is having repercussions on everything from global crude prices to military policy, as Beijing seeks to build a navy capable of securing supply lines extending to southeast Asia and the Middle East.

It is building out the first phase of its strategic reserve, which will include storage depots in four coastal cities. The facilities will have a capacity of more than 16m tonnes, while the second phase, which includes some sites inland, is planned to be double that.