September 24, 2103 [Platts] - The first shipment of crude oil from the United Arab Emirates for joint storage in South Korea will arrive in Yeosu Wednesday, the latter's energy ministry said Monday.
The 2 million-barrel shipment will be stored at the world’s largest oil storage facility in Yeosu, which can hold 49.7 million barrels, South Korea’s Trade, Industry and Energy Ministry said.
“It is the first shipment from the UAE for joint storage, and another 4 million barrels will arrive within six months,” a ministry official told Platts. A ceremony to mark the shipment’s arrival will be held Friday.
ADNOC signed an agreement with KNOC to use tanks in South Korea to store 6 million barrels of crude oil in last November on the sideline of talks between then South Korean President Lee Myung-Bak and Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed al-Nayhan.
KNOC agreed to forgo leasing fees in return for participation rights in developing three oil fields in Abu Dhabi.
“South Korea has the right of first use of the volume in the case of emergency,” the ministry official said Monday, adding: “The joint storage is part of South Korean efforts to transform its southern coast into an oil hub for Northeast Asia.”
KNOC operates nine storage bases that can hold a total 146 million barrels of crude oil and oil products, including tunnel-type underground tanks and the world’s single largest oil storage base. Of the total capacity, 127.5 million barrels is for crude oil, 14.1 million barrels for refined products and 4.4 million barrels for LPG.
A total 131 million barrels of crude and refined oil is stored in the facilities, including 40 million barrels of foreign oil. The ministry declined to disclose which countries were utilizing them, or their volumes.
Iraq on September 12 signed a memorandum of understanding that includes the joint storage of Iraqi crude in some of South Korea’s storage facilities.
The South Korean ministry did not disclose details of the joint storage plan, but Platts reported Iraqi oil minister Abdul Karim al-Luaibi as telling reporters in Seoul that Iraq plans to store about 4 million barrels of Iraqi crude for marketing in Asia in storage tanks in South Korea.
The ministry official described tank leasing as a “win-win”, giving South Korea first access to the foreign oil stored in its tanks in the event of an emergency, and foreign owners logistical advantages in tapping into the growing Asian market.
