Dagang Oilfield Co Ltd, a unit of China's largest oil and gas producer PetroChina Co Ltd (HK 0857), said it has started building a crude oil depot in Tianjin in northern China.

The depot, which will require investment of 200 mln yuan, is due to be completed in June 2008, the company said.

The oil depot will help support steady production at Dagang oil field and guard against market shocks, it noted.

Dagang oilfield has a production target of 6 mln tons of oil equivalent annually by 2010.

Dagang field produced 5.54 mln tons of oil equivalent in 2006, its highest output since the site was first tapped in 1964.

The field's proven oil reserves totaled 950 mln tons at the end of 2006, with natural gas reserves of 64.2 bln cubic meters.