ADNOC to store crude in S Korean facility for three years

  • Share via facebook
  • Tweet this
  • Bookmark and Share

The UAE's state-run energy giant Abu Dhabi National Oil Co (ADNOC) will lease oil storage facilities in South Korea capable of storing 6m barrels of crude for three years, state-run Korea National Oil Corp (KNOC) said on Thursday.

This is the first time the United Arab Emirates' ADNOC has leased storage in South Korea, a KNOC spokesman said. It becomes the twelfth international company to hold storage facilities located in the world's fifth-largest crude importer, joining other producers, oil majors and investment banks.

For producers, storage in South Korea gives them flexibility to meet fluctuations in demand from Asian buyers. It also allows them to sell smaller cargoes than the two million barrels that typically sail on Very Large Crude Carriers from the Middle East to Asia.

For South Korea, leasing storage to producers contributes to its security of oil supply. It has first rights to crude in storage in case of emergency.

The storage contract was signed on Wednesday.

"All 6m barrels of crude oil will be shipped to the storage facility within the first half of next year under the contract," a KNOC spokesman told Reuters by phone. The oil would be held in storage near the port of Yeosu, about 500 km south of Seoul, he said.

The Korean government holds a total of 146m barrels of storage facilities for its strategic crude and fuel reserves.

Of the total, 40m barrels of capacity is reserved for leases to oil producers, majors and investment banks, and as of end-October a combined 30m barrels of crude and fuel was stored there, according to KNOC data.

The announcement was made while Korean President Lee Myung-bak, and other government and business officials were visiting the UAE to mark the start of construction there of the country's first nuclear reactor. A Korean consortium in 2009 won an order for some US$20bn worth of nuclear plant and construction work there.

The visit comes after Seoul shut down two reactors in South Korea due to the discovery that thousands of components at the plants had forged safety certificates. The UAE has said it has been assured by Seoul on the safety standards of South Korean plants.

Related:
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Further reading

Features & Analysis
Saudi king keeps close hand on oil in remodelling strategic team

Saudi king keeps close hand on oil in remodelling strategic team

King is clearly laying the ground for a generational shift in...

Insider: Oil and gas sector in fear of hackers as cyber attacks surge 179%

Insider: Oil and gas sector in fear of hackers as cyber attacks surge 179%

Experts have put the vital industry on high alert as the threat...

Saudi Arabia adds to oil power with new refineries

Saudi Arabia adds to oil power with new refineries

Two state-of-the-art plants set to redefine Gulf kingdom's role...

Most Discussed
  • 16
    Nakheel PR: The toughest job in Dubai?

    @John...I actually laughed out load at that comment! Having said that..I still believe DAMAC hold the mantal for 'Redefining Trust'... more

    Sunday, 29 March 2015 6:06 PM - Simon
  • 8
    Post traumatic stress?

    I once had a Emirates Post employee hang up on me when I asked her to repeat something. That said, the worst is my management company, Kingfield Management... more

    Sunday, 29 March 2015 6:07 PM - Sarah
  • 8
    Drunk passenger who slapped air stewardess jailed in Dubai

    Really would help if some other commentators would understand the story and the airline.
    Flydubai doesnt give alcohol for free. They charge for it... more

    Sunday, 29 March 2015 9:07 AM - Ponder
  • 16
    Nakheel PR: The toughest job in Dubai?

    @John...I actually laughed out load at that comment! Having said that..I still believe DAMAC hold the mantal for 'Redefining Trust'... more

    Sunday, 29 March 2015 6:06 PM - Simon
  • 14
    Has Narendra Modi already lost the plot?

    Gaja - Anil is RIGHT this once! Modi stands for anarchy. Look at the way he is treating the minorities. Do you even for a second believe that he is innocent... more

    Sunday, 29 March 2015 1:42 PM - Ann
  • 8
    Post traumatic stress?

    I once had a Emirates Post employee hang up on me when I asked her to repeat something. That said, the worst is my management company, Kingfield Management... more

    Sunday, 29 March 2015 6:07 PM - Sarah