Tokyo has agreed in principle to allow the United Arab Emirates (UAE) to store crude in Japan for at least three more years, the trade ministry said on Monday, giving the No.2 crude supplier to Japan continued access to a supply depot.
The agreement allows UAE easy access to Asian markets while giving Japan priority access to reserves if Japan is in short supply of crude.
Japan has been giving UAE free crude storage for five years since 2009, and the memorandum of cooperation, signed on Sunday between Japan and Abu Dhabi’s Supreme Petroleum Council, extended the arrangement by three to five years, a trade ministry official said.
The deal allows UAE to get free crude storage space of 6.29 million barrels (1 million kilolitres) at Kiire oil terminal in Kagoshima, southern Japan. Currently Japan lends storage of 4.4 million barrels (700,000 kl) to the UAE, the official added.
Japan has a similar arrangement with Saudi Arabia under which Saudi can store 6.29 million barrels in Japan.