China needs to drastically expand its supertanker fleet to safeguard the security of its oil supplies, sources said Friday.

China is now the world's second largest crude oil importer. Imported crude accounts for 43 percent of its consumption. But over 90 percent of its imports are currently transported by foreign oil tankers, the Shanghai Securities News reported Friday.

The setup is both economically and strategically unsound, it said.

China has begun to build a strategic oil reserve system, but a strategic transport system is equally important, the newspaper said.

Li Lianzhong, an official with the central policy research institution, said, "To safeguard the security of national oil supplies, at least 50 percent of crude imports must be transported by our own supertankers."

Citing Japan as an example, he said Japanese ship owners have more than 20 million tons of supertanker capacity, equal to 80 percent of their annual oil imports.

According to the report, Chinese authorities are aware of the issue and will draft a preliminary plan after consulting major oil and shipping companies.

The plan calls for a 75-million-ton capacity Chinese supertanker fleet by 2010, which will be expanded to 130 million tons by 2020.

China is the world's third largest shipbuilding country and faces no particular technical difficulties in building supertankers, or Very Large Crude Carriers (VLCCs).

Chinese shipping companies are already expanding their supertanker fleets. China Shipping Group, a leading shipping company, recently ordered four VLCCs from the Dalian shipyard in northeast China.

DNV, the Norwegian classification agency, said in its report that Chinese shipping companies will order at least 50 VLCCs in the next five to six years. Some orders have already been placed with shipyards in Japan and China.

Source: Xinhua