Japan, Kuwait Reach Oil Storage Deal

Business

December 2nd, 4:45am

Kuwait - Asharq Al-Awsat

ILE PHOTO: An aerial view shows Kuwait City after the country entered virtual lockdown, following the outbreak of coronavirus, in Kuwait City, Kuwait March 16, 2020. Picture taken with a drone. REUTERS/Stephanie McGehee/

Japan said on Tuesday it has reached a joint oil storage deal with state-run Kuwait Petroleum Corp (KPC) to lend it 3.14 million barrels (500,000 kiloliters) of capacity for free. Under the deal, KPC can use storage tanks at refiner Eneos’ Kiire base in southern Japan of Kagoshima as an export base for eastern Asia. In return, Japan gets a priority claim on the stockpiles in case of emergency. The volume is equivalent to 1.5 days of its consumption. It is Japan’s third such agreement, following UAE’s Abu Dhabi National Oil Company (ADNOC) and Saudi Arabia’s Saudi Aramco, and is aimed at reinforcing its energy security, an official at the Japan’s Economy, Trade and Industry Ministry (METI) said. The latest deal will boost Japan’s leased oil storage capacity to a total of 19.5 million barrels (3.1 million kl). The supply from KPC can be also used in other Asian countries, mainly ASEAN nations, in case of emergency, the official said. In March, Tokyo mapped out a new international resource strategy under which it aims to expand oil stockpiling scheme which benefits Japan, other Asian countries and oil suppliers. Kuwait was Japan’s fourth-largest oil supplier in 2019 after Saudi Arabia, the UAE and Qatar, providing 8.5% of Japan’s oil import, the ministry’s official said.

from Asharq AL-awsat https://english.aawsat.com/home/article/2659536/japan-kuwait-reach-oil-storage-deal