South Korea has extended a joint crude stockpiling deal with Algerian state-owned energy group Sonatrach, the presidential office said on Friday.
The deal for stockpiling 4,6-million barrels of crude was extended to May 2011 from May this year, it said in a statement.
South Korea, the world’s fifth-largest crude buyer, currently uses 76-million barrels, or about 70% of its total 111-million barrel storage capacity, for strategic purposes, while the rest is used for joint storage with foreign firms.
Joint stockpiling gives South Korea first rights to purchase the crude in case of an emergency such as an oil shortage.
Most recently, Shell had leased three million barrels of storage from Korea National Oil Corporation (KNOC) for Iraq Basra Light crude.
South Korea has joint stockpile agreements with seven other firms, including Norway’s Statoil, Algeria’s Sonatrach, Swiss-based trader Glencore, China’s state trader Chinaoil and French major Total.
The rest is rented out to trading firms Masefield and Trafigura.
South Korea plans to increase crude oil stockpiling to 141-million barrels by 2010, up 27% from the current level. – Reuters