• 4 minutes 5 Tweets That Change The World?
  • 7 minutes Trump Tariffs NOT China's Biggest concern. Chinese Shadow Banking Bigger. What is Shadow Banking You Ask ?
  • 11 minutes Wonders of US Shale: US Shale Benefits: The U.S. leads global petroleum and natural gas production with record growth in 2018
  • 15 minutes Glory to Hong Kong
  • 3 hours PETROLEUM for humanity 
  • 10 hours Trump will capitulate on the trade war
  • 10 hours USA pulls troops from Syria
  • 5 hours National Geographic Warns Billions Face Shortages Of Food And Clean Water Over Next 30 Years
  • 1 hour Crazy Stories From Round The World
  • 7 hours KURDS LEFT HIGH AND DRY TO DIE?
  • 5 hours Iranian Oil Tanker struck by missiles off Jeddah
  • 9 hours Hong Kong Protests Still Going Despite Their ''Love'' Of China? Weird ...
  • 6 hours Communist China Following Nazi Germany's Playbook
  • 5 hours Scientists Endorse Mass Civil Disobedience To Force Climate Action
  • 3 hours How The US Quietly Lost The 1st Amendment
  • 45 mins Strategic beauty of attack on Iranian tanker
  • 14 hours Oilfield Layoffs
  • 3 hours DING DING DING DING DING DING DING DING DING DING DING DING DING DING DING DING DING
Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

More Info

Premium Content

The Value of Empty Space - Japan Secures Oil Supply

Here's an interesting one in the realm of oil security.

As we've discussed, Japan is using a lot less oil these days. In the last year, Japanese consumption dropped 800,000 barrels per day.

That's leaving the country's petroleum infrastructure under-used. Nippon Oil plans to idle 20% of its refineries by 2015.

Oil storage facilities are also sitting empty. And the Japanese government is getting creative in putting this "empty space" to productive use.
The plan is to use spare storage to guarantee secure oil supply.

The pilot for this scheme came in June 2009. Japan's Ministry of Economy, Trade and Industry signed an agreement to "borrow" 600,000 kiloliters (3.8 million barrels) of oil storage from Nippon Oil (no terms have been released for the agreement).

The government then turned around and offered the storage space to Abu Dhabi National Oil Corporation. On very favorable terms (it's unclear if ADNOC is being charged at all for the space).

On December 21, ADNOC delivered its maiden shipment of 300,000 kiloliters of Abu Dhabi crude to the facility. The firm will use Japan as a "foothold" in Asia to conduct oil trading. Having oil stocks closer at hand to China, Japan and other Asian nations allows ADNOC to act quickly when attractive prices appear in these markets.

Here's the kicker. In exchange for providing storage, Japan gets priority purchase rights in case of an energy emergency. If oil suddenly gets scarce, the Japanese have dibs on nearly 4 million close-at-hand barrels.

Not a bad use of empty space.

Here's to making something from nothing.

By. Dave Forest of Notela Resources




Download The Free Oilprice App Today

Back to homepage



Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play