February 14, 2018 / 9:01 AM / in 5 months

REFILE-UPDATE 1-Shanghai exchange approves bonded storage zones ahead of crude futures launch

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* Eight storage locations approved, most owned by state-run firms

* Exchange will use 3.15 mln cubic meters of capacity

* Long-awaited crude futures contract to launch on March 26

BEIJING, Feb 14 (Reuters) - The Shanghai International Energy Exchange (INE) said on Wednesday it had approved the use of six bonded storage warehouses at eight locations in China, ahead of the launch of its crude oil futures contract next month.

The storage capacity across the eight listed locations totals 5.95 million cubic meters, according to an INE statement, although the exchange will use only 3.15 million cubic meters of capacity, equivalent to 19.8 million barrels.

The eight locations include sites owned by PetroChina in Dalian, in the northeastern province of Liaoning, Zhanjiang in the southern province of Guangdong, and Ningbo in the eastern province of Zhejiang.

The bonded warehouses, where oil is stored until import duties are paid or until it is re-exported, are the INE’s designated delivery locations for its crude futures contracts. Six crude grades can be delivered on the INE, including five from the Middle East.

Two further storage sites are owned by Sinopec, in Shandong and Zhejiang, another by Sinochem in Zhoushan. The remaining two sites are in Qingdao, in Shandong, and in Yangshan in Zhejiang.

The three back-up warehouses included one owned by China National Offshore Oil Corp in Yantai, Shandong, as well as another site in Dalian and one in Yingkou, also in Liaoning.

After years of delays, the China Securities Regulatory Commission (CSRC) announced last week that China’s oil futures contract would start trading on March 26.

In a separate statement, the INE named four firms that had been approved to inspect the crude delivered into the bonded warehouses.

The companies are China Certification & Inspection Group Inspection Co Ltd., SGS-CSTC Standards Technical Services Co Ltd, Shanghai Orient Intertek Testing Services Co Ltd and the Technical Center for Industrial Product and Raw Material Inspection and Testing at the Shanghai Entry-Exit Inspection and Quarantine Bureau.

Reporting by Tom Daly; Editing by Christian Schmollinger

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