TonenGeneral Sekiyu, which is Japan’s second-largest refiner, has formed a 50:50 joint venture with Australian logistics company Qube Holdings to develop fuel storage facilities locally.

TonenGeneral Sekiyu was one of the largest oil product exporters to Australia in 2014, supplying 12% of the market, Qube said in a statement Tuesday.

Australia imported 21,203.3 million liters, or roughly 365,400 b/d, of oil products in the financial year ended June 30, 2014, the latest for which statistics are currently available.

Japan was the country’s third-largest supplier of those imports at 69,490 b/d, behind Singapore at 180,730 b/d and South Korea at 87,090 b/d.

TonenGeneral Sekiyu and Qube’s first project is to be a 230 million-liter storage facility at Port Kembla in the eastern state of New South Wales.

The joint venture plans to acquire the assets of the National Terminals group to facilitate the development, which will be built on land leased from NSW Ports.

Development and planning approval for parts of the facility have already been obtained and the process for the remaining assessment is well advanced, Qube said.

Subject to final approvals, the facility is expected to be commissioned in the second half of 2017.

The joint venture has also entered into an agreement to acquire the fuel marketing and distribution business Petro National in Australia.

The acquisition is designed to “capitalize on the opportunity to supply fuel from the new import terminal facility,” and the partners will also “assess other organic and acquisition opportunities to expand this integrated supply chain capability,” Qube said.

Total capital expenditure for the fuel storage facility, the National Terminals assets and the Petro National acquisition is expected to be around A$150 million ($74 million).

“The chronic shortage of fuel storage capacity in Australia presents a compelling investment opportunity, the appeal of which has only increased as local oil refineries close and Australia moves to a substantial reliance on imported fuel,” said Qube Managing Director Maurice James.

TonenGeneral Sekiyu Representative Director and President Jun Mutoh said Australia was a major export market for TonenGeneral.

“We are delighted to be partnering with Qube to expand our activities into the onshore business in the Australian market, and jointly enhance Australia’s petroleum products supply chain,” he added.

TonenGeneral Sekiyu is entering the Australian fuel supply sector behind Idemitsu and Mitsubishi, both of which have made investments in local storage and distribution assets. JX Nippon Oil & Energy and Cosmo Oil have also flagged their interest in supplying the Australian market.

Australia is now host to only four refineries, following the closure in May of BP’s 102,000 b/d Bulwer Island plant in the Queensland capital of Brisbane.

That brought to four the number of facilities that have been shut around the country since 2003, when ExxonMobil mothballed its 78,000 b/d plant at Port Stanvac in South Australia.

In 2012, Shell converted its 79,000 b/d refinery at Clyde in Sydney into an import terminal, and Caltex did the same with its 135,000 b/d Sydney facility at Kurnell in late 2014.

BP still operates the 146,000 b/d Kwinana oil refinery in Western Australia.

The nation’s other three refineries are Viva Energy’s 120,000 b/d Geelong facility in Victoria, ExxonMobil’s 85,000 b/d Altona plant in Victoria and Caltex’s 109,000 b/d facility at Lytton in Brisbane.

Production of refined products nationally is expected to decline by 13% to 515,000 b/d in the financial year ending June 30, 2015, mainly due to the closures of Kurnell and Bulwer Island, according to figures from the Office of the Chief Economist in the Australian Government’s Department of Industry and Science.

Output is set to fall further to 389,000 b/d in 2015-2016, as a result of the reduced refining capacity.