KNOC to start operating Yeosu oil storage terminal in January

In January of next year, a new 8.2 million barrel oil-storage terminal in Yeosu, South Korea, will begin commercial operations. This will create a trading hub that would link South Korea with China, Japan and the U.S. West Coast.
The storage terminal will be able to store 4 million barrels of crude oil and 4.2 million barrels of oil products. Korean National Oil Company (KNOC) has a 29% stake and is the biggest stakeholder in the terminal. China Aviation Oil Corp. owns 26%, South Korea’s two largest refiners, SK Energy Company and GS Caltex Corp., each hold 11% stakes.
According to Kwon Se-min, KNOC’s senior manager of the products and storage trading team, once trading at the terminal begins, new benchmark prices for some oil products in North Asia could be created, similar to benchmark prices already established in Singapore.
“China, Japan and Korea consume around 20% of global oil, but the market doesn’t fully reflect the region’s particulars in terms of pricing,” Kwon said. He added that in the event of a supply disruption, the Yeosu hub could complement regional strategic petroleum reserves. (June 13, 2012)