SEOUL, KOREA - A foreign exert suggested his opinion that an oil hub to be propelled by Korea in Ulsan is a win-win strategy, which is necessary for both the U.S. and Korea.
At the Northeast Asia Oil Hub Symposium, which was held at Seoul Westin Chosun Hotel and jointly hosted by the Ministry of Foreign Affairs and the Ministry of Trade, Industry and Energy, Lucian Pugliaresi, president of the Energy Policy Research Foundation (EPRINC), said, “An oil hub in Southeast Asia will play a positive role for both the U.S. and energy importers.”
President Pugliaresi said, “Improvement of energy price is necessary for countries in the Asia-Pacific region, including Korea and Japan, which import energy at expensive Asia-premium price. The oil hub is expected to bring about market stabilization through the region’s imports of LPG, condensate and North America-produced oil.”
As North America-produced shale oil is easy in transportation and cheap in price, it can play a role in persistently stabilizing the energy market, according to his explanation. Asia premium refers to a surcharge applied by oil producers in the Middle East to the East Asian region with a high dependence on the Middle East in case of exporting crude oil. He said, “Energy exports to the U.S. will play an important role in keeping the shale oil renaissance. If an oil hub is built in the Asia-Pacific region, a giant market, it can play a role as a demander, requesting the U.S. to keep shale oil production.”
The oil hub in Southeast Asia is a win-win strategy in which it can serve as a stable demander for the U.S. that exports shale oil and it can play a role in lowering energy price for Korea and Japan. In particular, President Pugliaresi forecast that it would bring about lowering of LPG price in the Asian region. If the U.S. expands its LPG exports to 500,000 barrels a day by 2018 and Japan, China and Korea import this, existing suppliers in Europe and the Middle East will face a pressure to pull down the LPG price, according to his forecast.
Bas Hennissen, vice president of Industry and Bulk Cargo Business at Port of Rotterdam, asserted, “If Korea hopes to become one of the world’s four oil hubs and the center of oil trade in Northeast Asia, it should benchmark the Rotterdam maritime and port administration and create oil hub environment, including infrastructure and regulations.”
Vice President Hennissen said, “Korea can build a successful oil hub ecosystem by establishing and connecting such infrastructures as oil refining facility, oil storage facility and trade. The government should provide infrastructure and such authorities as the maritime and port administration should establish price benchmark related to environmental regulation, financial regulation and effective trade.”