China is constructing oil reserves to insulate its economy from possible disruptions in foreign supplies. The United States also operates a similar reserve.

Gansu province in the northwest has been tentatively selected as the site of China's new reserve, said the newspaper China Petrochemical News, published by state-owned China Petroleum and Chemical Corp.

China's first oil reserve was built last year in four sites along the east coast in the provinces of Liaoning in the north, Shandong on the east coast and Zhejiang in the southeast.

The second reserve is to have a total storage capacity of 196 million barrels.