Eric Watkins
OGJ Oil Diplomacy Editor
LOS ANGELES, Dec. 16 -- Nippon Oil Corp. has reached a final agreement with Abu Dhabi National Oil Co (ADNOC) for the UAE firm to store oil in an effort to bolster Japan's national reserves.
Under the agreement, ADNOC will to store 3.9 million bbl of crude for 3 years starting this month at a reserve base in Kagoshima Prefecture in southern Japan.
The basic agreement, which will allow storage equal to a day’s consumption for Japan, initially was announced in June and is expected to help improve the Asian nation’s energy security.
At the time, Japan’s Ministry of Economy, Trade, and Industry said the agreement also would give Japan a preferential right to purchase the stored oil reserves there in times of emergency.
The scheme will also allow Abu Dhabi to sell its oil in other East Asian countries, such as South Korea and Taiwan, by using the Japanese base as a distribution terminal. According to METI, Abu Dhabi supplies nearly 40% of Japan's oil imports.
Contact Eric Watkins at [email protected].