Aramco, Japan to expand Okinawa crude storage deal
Under an agreement with Tokyo, Saudi Aramco and ADNOC each store up to 6.3mn barrels of crude oil in Okinawa
Saudi Aramco and the Japanese government are set to agree on a roughly 2mn barrel expansion of crude storage capacity in Okinawa, used by the state-run firm to store oil, Saudi Aramco CEO Amin Nasser said last week.
Under an agreement with Tokyo, Saudi Aramco and the Abu Dhabi National Oil Co (ADNOC) each store up to 6.3mn barrels of crude oil in Okinawa, southwest of mainland Japan.
In return for providing free storage space, Japan gets a priority claim on the stockpiles in case of an emergency.
"It would be in the best interest for Saudi Aramco and Japan to increase the capacity," Nasser told reporters in Tokyo. "We are looking at a couple of million (barrels) more than what we have now."
A Japanese trade ministry official said no agreement had yet been reached for additional storage, although a source familiar with the matter said the deal was set to be signed in October.
Nasser is accompanying Saudi Arabia's powerful Deputy Crown Prince Mohammed bin Salman on his visit to Japan this week, along with Saudi Arabia's Energy Minister Khalid al-Falih and other ministers.
Japan treats the crude oil stored at Okinawa as quasi-government oil reserves, counting half of the barrels stored by Aramco and ADNOC as national crude reserves.
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.
Also last week, Aramco signed memorandums of understanding on business cooperation in Tokyo with Japanese companies including three major banking groups.