September 19, 2012 [4-Traders] - Korea National Oil Corp. plans to begin work on a KRW1.6 trillion ($1.4 billion) oil storage and trading hub in Ulsan starting next year, its chief executive said.
The hub will be a “very important project” for the company and Ulsan, a coastal city in southeastern South Korea well-located to receive oil exports from countries such as Canada and the U.S., Suh Moon-kyu, KNOC’s newly appointed president and chief executive, told The Wall Street Journal in an interview Tuesday.
“Foreign oil majors and trading companies will surely want to use the hub,” Mr. Suh said.
BP PLC, the Netherlands’ Vopak, Russia’s Gazprom Neft and Bank of China have expressed interest in investing in the project, he said.
The hub, consisting of two terminals, will have a total storage capacity of 28.4 million barrels, including a 9.9 million-barrel terminal for petroleum products and an 18.5 million-barrel terminal for crude oil, the company said. It aims to have the tank for petroleum products completed by 2016.
KNOC is set to begin commercial operations at an 8.2 million-barrel oil terminal in Yeosu in March, Mr. Suh said.
KNOC is the biggest partner in the smaller terminal, with a 29% stake. China Aviation Oil Corp. has a 26% stake. SK Energy Co. and GS Caltex Corp., South Korea’s two largest refiners, each hold an 11% stake.
