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

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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.

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