Storage we can bank on

Jurong Island, located to the southwest of Singapore, is full of oil tanks. The artificial island off of Jurong Industrial Estate also has many refineries and terminals of the world’s major oil companies. That’s one important reason why the small city-state of Singapore could become Asia’s oil hub. In fact, Singapore not only attracts petroleum from all over the world, stores it in gigantic facilities and then transports it all over Asia, but it also refines and exports petroleum products.

Meanwhile, Europe’s oil hub is the Netherlands. In the so-called ARA area linking Amsterdam to Rotterdam and Antwerp, Belgium, is a huge storage base capable of stockpiling 90 million barrels of crude oil, which is enough to sustain the country for two to three months. The special zone also supports the Dutch economy - with over 4 percent of the GDP - by exporting oil and related products through refinery facilities and terminals.

Singapore and the Netherlands are countries in which not even one drop of crude oil is pumped. Yet they exert a strong influence as the world’s oil powers because they are significant oil hubs on each continent.

That gives us a clue as to why South Korea should become the oil hub for Northeast Asia despite its scarcity of oil resources. The government finally took the first step toward this ambitious goal with the completion of an underground storage base in Ulsan, South Gyeongsang, wrapping up a 30-year plan to build a national petroleum storage facility.

As a result, South Korea’s oil storage capacity has risen to 146 million barrels. Now, the government should do all it can to make the country an oil hub for Korea, China and Japan.

If we can emerge as an oil hub for Northeast Asia, which consumes 18 percent of the global demand, the economic benefits would be tremendous.

First of all, the region’s previously unstable supply of oil will be secure. The competitiveness of our oil industry would also be fortified, along with expected growth in related industries such as finance, trading and storage.

At the end of last year, South Korea was the recipient of good news when the United Arab Emirates requested that our government lend them our oil storage facilities so they could store 10 million barrels of oil. Even though both sides are still negotiating over the lease fee, we hope the government will strike a satisfactory deal. That would put us one step closer to achieving our goal of being an oil hub for Northeast Asia.

On this occasion, we urge the government to consider scrapping various regulations - such as the customs tax or corporate tax - that stand as major stumbling blocks to the road ahead.