Saudi Arabia intends to store its crude oil in the "Jurong rock caverns" in Singapore starting from the second half of 2027. This news was announced at the "International Energy Week" conference in Singapore by Tan See Leng, the Minister of Energy, Trade and Industry of Singapore.
Details of the Storage Agreement
The Minister of Energy of Singapore stated that this agreement is aimed at creating a mechanism for the storage of Saudi crude oil in the Jurong rock caverns. The mentioned caverns are located 150 meters underground and have a storage capacity of 1.47 million cubic meters, equivalent to about 9 million barrels of liquid hydrocarbons, including crude oil and condensates.
Saudi Aramco will also sign a memorandum of understanding with the "Energy Market Authority" and the "JTC Corporation" to finalize negotiations for this project in the coming months.
Impact on Energy Security
Prince Abdulaziz bin Salman Al Saud, the Minister of Energy of Saudi Arabia, in a video message broadcast at this conference, highlighted the importance of bringing supply sources closer to major Asian markets, stating that this move will enhance the flexibility of the supply network and support Singapore's supply security and readiness in the face of disruptions.
Saudi Aramco currently stores its crude oil in Japan and South Korea. Countries in this region prioritize purchasing from storage facilities in the event of unexpected energy supply shortages. For example, in September 2017, Aramco increased its crude oil storage capacity in Okinawa to 8.2 million barrels under an agreement with the "Japan Oil, Gas and Metals National Corporation (JOGMEC)."
Additionally, in 2023, Aramco signed a contract with the "Korea National Oil Corporation" under which this company will store 5.3 million barrels of oil at storage facilities located in the Port of Ulsan, South Korea, for five years.
On the other hand, Japan is negotiating with Asian countries to increase crude oil storage across the region. This initiative is part of the "Partnership for Enhanced Resilience in Energy and Resources in Asia (POWER Asia)" proposed by Prime Minister Sanae Takaichi, with a budget of $10 billion allocated for it.
Despite the efforts of China, Japan, and South Korea to significantly store oil, most other countries in the Asian continent have less storage capacity in the event of supply shock shortages.
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