December 1, 2020
Japan strongly promotes joint oil storage projects with oil producers
On December 1, 2020, the Agency for Natural Resources and Energy (ANRE) and the Kuwait Petroleum Corporation (KPC), the State of Kuwait, signed an agreement on starting a joint oil storage project.
Under this agreement, Japan and Kuwait will embark on joint oil storage at a level of 500,000 kl. In light of the global situations with growing instability, this project has a great significance in not only fortifying the relationship between Japan and Kuwait, a major crude-oil supplier to Japan, but also in improving Japan’s crisis response ability.
On December 1, 2020, ANRE and KPC, the national oil company of Kuwait, signed an agreement on starting a joint oil storage project to store 500,000 kl of crude oil from Kuwait in Japan.
Outline of the project
In this project, crude oil tanks installed in Japan will be leased to KPC with the support of the Government of Japan. In non-crisis periods, the company will make use of the tanks as bases for supplying oil to East Asian countries including Japan, and if Japan faces an emergency situation such as shortage of crude-oil supply, the company will preferentially supply the crude oil stored in the tanks to Japan.
This agreement stipulates that the leased tanks should have a capacity to store 500,000 kl of crude oil (approximately 3.14 million barrels), which is equivalent to approximately one and a half days’ worth of Japan’s oil demand.
This Japan-Kuwait joint oil storage project will also seek “cooperation in storing oil which contributes to providing benefits trilaterally: to Asian countries, Japan and oil producers,” a goal upheld in the New International Resource Strategy formulated in March 2020, which allows oil supply to a third Asian country in an emergency.
In light of increasingly unstable global situations, this project has a great significance in not only fortifying the relationship between Japan and Kuwait, a country on which Japan depends for about 8.5% of its total crude oil imports (based on the results in 2019), but also improving the crisis response ability of Japan as well as other Asian countries.