Eyeing Oil Logistics Center
KNOC plans to expand its oil storage business to international oil companies

The government held a ceremony in Seosan, South Chungcheong Province, Aug. 16 to dedicate its third oil storage compound capable of holding 14.6 million barrels of oil with high-ranking government officials and business leaders attending led by Prime Minister Lee Hae-chan.
The new oil storage with 24 tanks brought the nation's total reserve oil storage capacity to over 100 million barrels. Also attending the ceremony included Commerce, Industry, and Energy Minister Lee Hee-beom, South Chungcheong Province Gov. Shim Dae-pyong and President of Korea National Oil Corp. Yi Ok-su.
The government took on the construction of a number of oil storage reserves around the country in 1997 starting with one at Donghae and Yeosu and Geoje Island.
Prime Minister Lee, in his congratulatory speech, said the dedication of the Sosan Oil Storage completed the nation's oil storage network bringing stability to supply and demand for oil in the country.
The oil storage also brought new momentum for the economic take-off of South Chungcheong Province, along with the construction of Daesan Harbor.
MOCIE Minister Lee, in his speech, said the completion of the oil storage facility has a significant strategic meaning, strengthening Korea's aspiration to become a logistics center in Northeast Asia and spurring logistics activities boosting chances for a joint oil storage operation with OPEC countries. He noted that the Sosan complex is the largest above ground oil storage base in the country with 24 tanks capable of holding 11 million barrels of crude oil, 600,000 barrels of gasoline, 1.2 million barrels of kerosene, 1.8 million barrels of diesel, among others, altogether 14.6 million barrels.
At the ceremony, Choi Kang-shik, manager with KNOC received the Silver Tower Industrial Medal, while manager Ahn Sung-shik of Ssangyong Construction, won the Iron Tower Industrial Medal.
The country has 73 million barrels in reserve, which means that it has room for more oil storage with its total oil storage capacity totaling 116 million barrels with the completion of the Sosan oil reserve storage.
The oil storage business earns through put charges from international oil companies and at the same time, the country has the right to borrow these oil in emergency, strengthening the country's oil security.
Northeast Asian countries consume 15 million barrels of oil per day, accounting for 19 percent of total oil consumed in the world per day. Included in the region are such large oil consuming countries as China, the second in the world, and Japan, the third in the world, South Korea the 7th and Taiwan 19th.
What makes Korea to do well in this sort of business is that most of its ports can accommodate oil tankers of all sizes due to their natural conditions. In contrast, China has only five such ports, enabling Korea to lead the market.
Since 1999, KNOC started joint oil storage business with such countries as Norway, China? national oil company and other reputable international oil firms. From 1999 to April this year, a total of 150 million barrels of oil changed hands in storage terminals.
At the moment, KNOC is in talks with Algerian national oil company on the deal, and it plans to hold talks with Australia, India, and New Zealand, among others.
Yi Ok-su, KNOC president, said oil reserve has been turned into a large logistics business, and KNOC plans to turn Korea into an oil futures market under its long-term strategy.
KNOC plans to be center of a logistic center for petroleum products and secure a stable supply of oil by expanding overseas business enclaves. The core of the strategy is to expand the oil supply sources outside the Middle East.
KNOC, under this strategy, is about to begin tapping oil in the Sakhalin No.3 mining district.
The state-run oil company also secured the rights to explore oil in Kazhakstan and Nigeria where KNOC is ready to explore oil from November. nw

Dignitaries including Prime Minister Lee Hae-chan, fourth from left, attend the dedication ceremony for Seosan Oil Storage Complex