RIYADH: Saudi Arabia plans to store crude oil in Singapore from the second half of 2027 under a proposed arrangement aimed at strengthening its supply chain in Southeast Asia and supporting the city-state’s energy security.
Singapore’s Energy Market Authority and JTC Corp. exchanged a memorandum of understanding with Saudi Aramco at the Singapore International Energy Week, marking an initial step toward establishing the arrangement.
Saudi crude would be stored at the Jurong Rock Caverns on Jurong Island, and is intended to support Singapore’s energy needs in the event of supply disruptions, according to a joint announcement by the respective governments.
The arrangement comes amid severe disruption to energy supplies caused by the US-Israeli war with Iran, which has affected oil shipments through the Strait of Hormuz and prompted Asian countries to draw down inventories. Asia imported about two-thirds of its oil supplies from the Middle East before the war, according to Reuters.
Speaking at the event, Singapore’s Minister for Energy, Trade and Industry, Tan See Leng, said: “We aim to conclude negotiations in a few months’ time.”
Storage capacity
The joint announcement did not disclose the volume of Saudi crude to be stored or the arrangement’s financial terms. Singapore’s Ministry of Energy, Trade and Industry and Saudi Arabia’s Ministry of Energy said they would work together to advance the arrangement and coordinate its implementation with relevant entities.
The Jurong Rock Caverns facility lies 150 metres below ground and can store up to 1.47 million cubic metres of liquid hydrocarbons, according to JTC. This is the facility’s total capacity; the announcement did not specify how much would be allocated to the proposed Saudi arrangement.
Asian supply network
The proposal follows an existing Saudi crude storage partnership in Japan. In November, Aramco and the Japan Organization for Metals and Energy Security renewed an agreement covering approximately 8.2 million barrels of crude oil storage in Okinawa for three years.
Under the arrangement, Japan receives preferential access to the stored crude in an emergency, while Aramco uses Okinawa as a strategic supply hub to serve customers across Asia. The partnership began in 2010.
Singapore has also been strengthening its energy partnerships elsewhere in the Gulf. Tan said Singapore renewed an MoU on liquefied natural gas and low-carbon technology cooperation with QatarEnergy and signed another establishing a joint energy taskforce with Abu Dhabi National Oil Co. during the preceding week.