The Abu Dhabi National Oil Company (ADNOC) has signed a strategic agreement to store crude oil at storage facilities in Japan, Abu Dhabi's state-held oil firm, which pumps nearly all the oil in OPEC's third-largest producer, said.
Under the strategic agreement, which extends a previous deal expired at end-2019, ADNOC will store over 8 million barrels of crude oil at storage facilities in Japan and could trade that oil as the Abu Dhabi company is pushing into the oil trading business. At the same time, ADNOC will make sure that there is some amount of crude oil left at the Japanese facilities in case of oil shortage or emergency.
The new three-year deal "positively contributes to Japanese energy security, while also supporting Adnoc's broader trading ambitions," Dr Sultan Al Jaber, UAE Minister of State and ADNOC Group's chief executive said in a statement, as carried by The National.
Around a quarter of Japan's crude oil imports come from the UAE, while 90 percent of Japanese oil demand is met with imports from the Middle Eastern region, according to Reuters estimates.
For resource-poor Japan, the deal is part of boosting its energy security, while ADNOC gets access to more storage and trading opportunities in the world's fastest-growing oil demand market, Asia.
Japan Oil, Gas and Metals National Corporation (JOGMEC) renewed last month the crude oil tank lease agreement with Saudi Aramco. The Saudi Arabian state oil giant will be able to store crude oil in the next three years at a facility in Okinawa, while Japan will receive preferentially the crude in case of emergency.
In 2018, ADNOC announced its intention to expand downstream
operations in and outside the UAE, "to take full advantage of the rising demand for higher value refined and petrochemical products, particularly in the growth economies of China and Asia."
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More
U.S. Power and NatGas Prices Plummet to Below Zero
Ukrainian Drones Hit Major Rosneft Refinery in Russia
First Niger Oil Bound for China Blocked in West Africa Border Row
Gas Prices Likely to Keep Falling Ahead of Peak Driving Season
Drone Attacks Take Khor Mor Gas Field Offline, Claims Lives