RPT-UAE's ADNOC delivers 2 mln bbls crude to S.Korean storage facility
(Repeats to additional subscribers with no changes to text) SEOUL, Sept 27 (Reuters) - Abu Dhabi National Oil Co has delivered 2 million barrels of crude to South Korean storage facilities, the first such shipment by the UAE firm after it leased the space to store six million barrels, South Korea's energy ministry said. Leasing benefits South Korea in terms of oil supply security as it has first rights to the stored crude in case of emergency, while the arrangement allows leaseholders to quickly move cargoes in the region to meet any change in demand. Abu Dhabi National Oil Co, or ADNOC, rented the space to store six million barrels from South Korea late last year, becoming the twelfth international company to hold storage facilities in the world's No.5 crude importer, joining other producers, oil majors and investment banks. The remaining 4 million barrels from the state-run energy giant are scheduled to be delivered within six months, the ministry said in a statement, adding that six million barrels of crude is equivalent to 2.7 days of consumption based on South Korea's daily consumption level in 2012. The South Korean government holds 146 million barrels of storage capacity for its strategic crude and fuel reserves. Of the total capacity, 40-50 million barrels are reserved for leases to oil producers, majors and investment banks. As of end-August a combined 38.3 million barrels of crude and fuel was stored there, according to the ministry statement. Besides ADNOC, the others who use the storage facilities include national oil firms such as Norway's Statoil, Algeria's Sonatrach, Azerbaijan's SOCAR, China's Unipec and Chinaoil, the ministry statement noted. Oil majors like Royal Dutch Shell Plc and Total , international oil traders like Switzerland's Vitol, Mercuria, and investment banks like Morgan Stanley and JP Morgan of the United States are the other users. Storage in South Korea gives oil producers the flexibility to meet fluctuations in Asian demand, while also allowing them to sell smaller cargoes than the 2 million barrels that usually sail on Very Large Crude Carriers from the Middle East to Asia.
Details of the South Korea's oil storage capacity and current storage volumes are as follows (in million barrels, as of end-August, 2013), according to the ministry statement:
CAPACITY STORAGE VOLUME Crude Products Total Crude Products Total Government 127.5 18.5 146.0 77.6 12.3 89.9 Private 43.9 97.5 141.4 52.4 50.1 102.5 Total 175.4 116.0 291.4 130.0 62.4 192.4
Note: The ministry statement said it did not add the 38.3 million barrels oil stored by oil producers, majors and investment banks under leasing contracts to the above 89.9 million barrels. The leased volume is included under total government capacity of 146 million barrels.
(Editing by Himani Sarkar)