South Korea recently eased restrictions on the modification of petroleum products within customs zones of its ports. Producers can now blend lubricants, for example, in areas designated for storage, temporary inspection and international trade.
The South Korean Ministry of Trade, Industry and Energy eased the countrys petroleum product management regulations in October as part of an effort to trade increased volumes of oil and establish its southern coast as Northeast Asias most prominent oil trading hub.
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International oil traders are now permitted to mix petroleum products to form new blends within South Koreas 14 general bonded zones administered by its customs agency. General bonded areas combine the functions of designated bonded areas – which are confined to temporary storage and inspection of products – and licensed bonded areas, which allow for the storage, manufacturing, exhibition and sale of goods.
Prior to the revision, alteration of petroleum products within bonded areas was restricted to minor calibrations. For example, diesel traders could mix biodiesel with diesel, but lube suppliers could not blend base oils with additives to create a finished lubricant formulation to trade.
Such blending activities still require approval, however, an official of the Korea Petroleum Quality & Distribution Authority, or K-Petro, told Lube Report Asia. A person or company who intends to engage in the international petroleum trading business should file a report with K-Petro along with business plans and documents on ownership or leasing of storage facilities in bonded areas, said Kim Jisook.
With this new capability, oil traders could supply value-added products in more diverse sorts and properties, the Ulsan Development Institutes Kang Younghoon told Lube Report Asia. This is one of the efforts to turn the petrochemical cluster of Ulsan and Yeosu into Northeast Asias oil shipping and storage hub.
Koreas ongoing plan to transfigure its main southern ports into a mega-hub for oil trading includes the construction of additional storage capacity for petroleum products in the amount of more than 8 million barrels in Yeosu and nearly 30 million barrels within the Ulsan Port Authority region.
The ministry defines petroleum products as gasoline, kerosene, light oil, heavy oil, finished lubricating oil, petroleum gas and hydrocarbon oil – which includes base oils, according to an official.