South Korea's state-owned KNOC has signed a deal with Saudi Arabia's state-controlled Saudi Aramco to store 5.3mn bl of crude at the KNOC storage facility in Ulsan.
The deal was signed during a visit by South Korean president Yoon Suk Yeol to Saudi Arabia and is part of increased cooperation between the two countries in the energy sector, KNOC said. KNOC added that by storing the crude, it has secured volumes can be utilised in the event of an energy crisis.
KNOC said that with oil prices fluctuating because of political instability in the Middle East owing to the Hamas-Israel conflict, the firm has strengthened its ability to respond to national energy security by attracting large quantities of Mideast Gulf crude into the country.
Saudi Arabia is the biggest crude supplier to South Korea. Around 890,000 b/d of Saudi crude flowed into South Korea over January-August, comprising nearly 33pc of South Korea's total crude imports. Mideast Gulf crude made up 72pc of South Korea's total crude imports of 2.72mn b/d in January-August.
KNOC had also signed a deal in January to allow the UAE to store crude in Yeosu, in exchange for preferential buying rights in case of a domestic supply shortfall. Under that deal, KNOC will receive preferential purchase rights for 4mn bl in the event of domestic supply shortages, in addition to securing rental profits of $14.4mn over three years, in exchange for allowing Abu Dhabi's state-owned Adnoc to store crude oil at its Yeosu storage facility.
By Azlin Ahmad
