CONFIDENTIAL
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2
XCC(80)82
(c) two Long Range Tanker 2's (LR2) moored in
Hong Kong waters.
Workings have been on the basis of providing thirty days' supply of
fuel oil, which is approximately 200,000 tons.
Background
4.
Hong Kong is likely to be most vulnerable in respect of...
fuel oil from now until the end of 1981 when increased storage
facilities at Lamma and Tap Shek Kok will be completed providing about
100,000 tons of storage space at each. During the interim period, Shell
will have about 45 days of HEC's requirements stored on land. Esso ill
have from 23 to 35 days supply in respect of CLP. The situation will
further ease in 1982 with the opening of the new power stations with
their coal-burning capability and by about 1985 both power companies could be generating 50% of their power by use of coal. There scems
to be little prospect of the reliability of supplies, particularly from the Middle East, improving in the foreseeable future. So, as the
economics of storage in tankers are much more attractive than they were
last year, it is proposed to add roughly a further 30 days supply to
the strategic reserves by this means. The situation will be reviewed
after one year, with the object of dispensing with the reserves in
tankers at the date most appropriate in the context of the overall supply
capability.
5.
If providing strategic reserves of fuel oil by this means
proves attractive, then the possibility of using it for holding strategic reserves of other products can be considered.
Costings
6.
The Shell Company have very kindly cooperated with the
/Government
CONFIDENTIAL
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