On the 21st, 2 million barrels of crude oil from Abu Dhabi National Oil Company (ADNOC), the state-owned oil company of the United Arab Emirates (UAE), were delivered to the Korea National Oil Corporation (KNOC) Yeosu Storage Base, bringing the total crude oil stockpile to 4 million barrels.
The 2 million barrels of ADNOC crude oil delivered on this day were brought into the country under the 'KNOC-ADNOC International Joint Stockpile Agreement' signed during President Yoon Suk-yeol's state visit to the UAE in January.
The international joint stockpile project is a program where oil-producing countries lease KNOC's storage facilities to store crude oil and petroleum products, securing a priority purchase right for Korea to use the stockpiled volume in emergencies, thereby enhancing national energy security.
Since 1999, KNOC has continuously carried out this project targeting major oil-producing countries in the Middle East and international traders.
KNOC plans to store a total of 4 million barrels of UAE crude oil, including the newly imported 2 million barrels, at the Yeosu Storage Base, enabling release domestically in emergencies and thereby further strengthening the country's ability to respond to energy crises.
The large-scale domestic acquisition of ADNOC crude oil not only enhances energy security but also offers significant economic benefits.
Storing 4 million barrels of UAE crude oil at domestic storage bases would typically require about $300 million in crude oil purchase costs, but this international joint stockpile agreement with ADNOC has allowed for a reduction in such purchase expenses.
Additionally, foreign currency revenue corresponding to storage base rental fees can be secured, and a large quantity of high-quality, low-sulfur light crude oil preferred by domestic refiners compared to other Middle Eastern crude oils will be stored at the Yeosu Storage Base.
The energy industry evaluates this international joint stockpile agreement as a successful business model benefiting both KNOC and ADNOC, as ADNOC has secured a stable crude oil supply hub in South Korea, a major crude oil importer in the Northeast Asian region.
KNOC stated, "This is meaningful as it represents the tangible results of the international joint stockpile project conducted by both companies and the energy cooperation efforts between the two countries."
The Ministry of Trade, Industry and Energy said, "The import of UAE crude oil through the international joint stockpile project is the fruit of efforts to strengthen South Korea's energy security and will serve as an opportunity to further solidify the energy partnership between Korea and the UAE."
KNOC and ADNOC have maintained a close cooperative relationship in the oil and energy sector, jointly producing crude oil in the UAE Haliba field. In 2022, they signed a joint research agreement on blue ammonia, accelerating cooperation in hydrogen, ammonia, low-carbon, and renewable energy sectors.
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