The state-owned Kuwait Petroleum Corporation (KPC) has signed a crude oil storage deal with Japan’s Resources and Energy Agency, part of the country’s Ministry of Economy, Trade and Industry (METI).
Under the terms of the deal, KPC will be able to store 5 million L (3.14 million bbl) of crude oil in tanks in Japan, supported by the Japanese government. KPC will be able to use the tanks as its supply base for East Asia, although it will preferentially supply Japan over other countries in the event of an emergency such as a crude supply shortage. 5 million L is equivalent to 1.5 days of oil consumption in Japan.
METI says that the deal is significant in the light of a destabilising world situation, as it will strengthen relations with Kuwait, which is a major supplier of crude oil to Japan, providing around 8.5% of its oil in 2019, and will improve Japan’s ability to respond to a crisis.
According to Argus Media, the tanks to be used by KPC are at the Kiire oil terminal in Kagoshima prefecture in the south of Japan, which is owned by Japanese refiner Eneos. The Kiire oil terminal is also used by Abu Dhabi’s ADNOC, as part of a similar storage deal signed with Japan in January 2020. Japan also has a storage agreement with Saudi Aramco, which can store up to 6.3 million bbl of crude on the island of Okinawa.