Abdullatif Al-Houti, Managing Director of International Marketing at state-run Kuwait Petroleum Corporation denied speculation that Kuwait has plans to set up strategic oil reserves in China, Vietnam or elsewhere in Asia
“The lower the crude price is, the more it will be unattractive to store petroleum abroad,” explained Abdullatif Al-Houti, citing a recent downward trend in international prices. Crude oil fell to a 13-month low in Asia last week on mounting distrust in the future of global financial markets.
Earlier this year, Kuwait Petroleum International (KPI), KPC’s international refining unit, established a joint venture with a major Japanese refiner Idemitsu Kosan Co and two other firms to construct a $6 billion refining and petrochemical complex in northern Vietnam.
According to Al-Houti, in August, KPC signed a contract with the Vietnam-based joint venture to supply 200,000 barrels per day (bpd) of crude for the planned refinery, which is expected to be operational late 2013.
KPI is also leading a joint venture with Asia’s top refiner Sinopec for a 300,000 bpd refinery in China’s southern Guangdong Province. By 2010, China plans to maintain a strategic oil reserve equivalent to 30 days of imported oil, or about 10 million tons.
In October 2006, KPC and the state-run Korea National Oil Corp launched a three-month pilot prgram to stockpile 2 million barrels of crude oil till December, in an attempt to examine how the scheme would work. The deal was South Korea’s first stockpiling agreement with a member of the Organization of Petroleum Exporting Countries (OPEC).