State-run Japan Oil, Gas and Metals National Corp (JOGMEC) said it signed a contract with the world’s top exporter Saudi Aramco on Wednesday to extend a crude oil storage deal on the island of Okinawa by three years.
Under the agreement, Saudi Aramco can store up to 1 million kilolitres (6.3 million barrels) of crude oil on the island southwest of mainland Japan for the next three years, JOGMEC said in a statement.
The volumes are unchanged from the previous three-year deal, which is expiring this month. Japan and Saudi Aramco had earlier been discussing expanding the Okinawa crude storage by about 2 million barrels.
The volumes could still rise during the three years of the new contract, depending on the Japanese government’s budget and the availability of tank space, a JOGMEC official said.
In return for providing free storage space to Saudi Aramco, Japan gets a priority claim on the oil stocks in an emergency.
Saudi Aramco has stored crude in Okinawa since February 2011, and has used the facility to supply oil to China, Japan and South Korea among others.
Japan has a similar storage deal with Abu Dhabi National Oil Co under which the Middle Eastern oil company can store the same volume of crude at the Okinawa facilities.
Japan treats the oil stored by Aramco and ADNOC at Okinawa as quasi-government inventory, counting half of the barrels as part of the national strategic crude reserves.