South Korea Oil Hub Project to Promote 3 Way Cooperation with China and Japan

D-Bo , June 16, 2015, 9:37 a.m.

South Korea expects its oil hub project to promote three-way cooperation with China and Japan, a senior Foreign Ministry official said Tuesday. South Korea aims to become one of the world's top four oil hubs by 2020 to be on the par with the United States, the Netherlands and Singapore.

"Northeast Asia is considered most vulnerable to energy security," Deputy Foreign Minister for Economic Affairs Lee Tae-ho said in his speech at the 2nd Northeast Asia Energy Hub Symposium in Seoul. He stressed the need for concerted efforts by the regional powers to deal with the problem.

"Joint efforts among the three countries are required to diversify their energy suppliers," he said. Lee pointed out the trio account for around 20 percent of global oil consumption, with demand continuing to grow. South Korea imports 96 percent of the energy it consumes domestically and China leads global economic growth. Japan is increasing oil and gas imports after the Fukushima nuclear power plant disaster.

In that regard, South Korea's "Northeast Asia Oil Hub Project" will also contribute to the stability and co-prosperity of the region, he said. Lee cited South Korea's geographic advantages connecting China, Japan and Russia, and its natural harbors with deep water along with a number of world-class oil refineries.

"South Korea could become an optimal place for such a new oil hub," he said. Under the program, the country will invest US$2 billion to set up a 37-million-barrel oil storage facility in the southern cities of Ulsan and Yeosu.

The conference drew about 200 local and foreign officials and experts, jointly sponsored by the Ministry of Trade, Industry and Energy and Korea National Oil Corp. Mikkal Herberg, research director of the energy security program at the U.S. National Bureau of Asian Research, said Northeast Asia's energy security prospects are improving. "Oil markets seem to be entering a lower price period," he said. "Russia is also shifting oil and gas export focus eastward amid economic sanctions by Western countries."

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