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An Outline of Petroleum stockpiling in Japan

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					An Outline of Petroleum stockpiling in Japan




                  October 2001
1. Current status of reserves in Japan(1/2)

                          120
                                      Government stockpiling
                          100
                                      Private sector stockpiling
                          80
             Million kl




                                                            7 9    17 20                            61 67 74 75 76 81 85 85 84
                          60                            7                24 31 35 42 45 51 53 54 56
                          40
                          20    57 61 77 79 93 94 85 92 98 101 99 98 96 90 97 98 91 90 88 86 82 80 84 74 80 86 82 76 77
                           0
                                72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00
                                                                                                                  As of the end of calendar year

                                   •First oil crisis    •Second oil shock                          •Gulf war
      Major                           •Inauguration of IEA
      events                               •Introduction of oil reserve law
                                              •Enactment of oil reserve law

     Government                                                                                  50 millions kl policy(89)
                                                        30 millions kl policy(78)
     stockpiling


     Private sector             Set-up to 60 day reserve policy plan(72)                      Set-up to 70 day reserve policy plan(89)
      stockpiling
                                             Set-up to 90 day reserve policy plan(75)




  Notes 1 ; Government and private sector stockpiles are calculated according to the inventory of oil products.
  Notes 2 ; Reserve days figures are calculated according to the Petroleum Reserve Law.
2. Current status of reserves in Japan(2/2)

  Reserve Policy
   1971 Call for 60 day private sector stockpiling by Consolidated Energy Assessment
        Association
   1974 Call for 90 day private sector stockpiling by Consolidated Energy Assessment
        Association
   1975 Achievement of 60 day public sector reserves
   1978 Call for start of government stockpiling by Consolidated Energy Assessment Association
        Official name JNOC decided
        Begin government stockpiling [tanker reserves]
        Consolidated Energy Assessment Association sets 30,000,000 kl government stockpiling
        guide line
   1981 Achievement of 90 day private sector stockpiling
   1983 National oil storage bases [partial completion]
   1985 End tanker reserves
   1987 Consolidated Energy Assessment Association, Petroleum Reserve Review Committee
        sets 50,000,000 kl government stockpiling guide line
   1989 Achievement of 30,000,000 kl government stockpiling
   1996 Completion of national oil storage bases [ten bases]
   1998 Achievement of 50,000,000 kl government stockpiling
 3. Outline of petroleum stockpiling system


                                     Stockpiling in national
                                        oil storage bases

              Government                                          Joint
               Stockpiling
                                      Private sector tanks
                                                                reserves
              Target of                 leased by JNOC
Petroleum     50 million kl                                    Private oil
Stockpiling   reached in Feb. 1998
                                                               refineries

              Private Sector         Stockpiling by private
               Stockpiling               oil companies
              Obligatory inventory
              70-day consumption
  4. The current state of Japan‘s national and private
      reserves

                                 Government stockpiling                     Private sector stockpiling
Authorized by                  The JNOC Law                            Petroleum stockpiling Law
Current reserve days           84days                                  77 days
(As of the end of Dec.2000)
Current reserve volume         47,210,000kl (Product base)             43,535,000kl (product base)
 (As of the end of Dec.2000)
Holding make-up                100% Crude oil                          Product oil 55%, Crude oil 45%
 (As of the end of Dec.2000)
Existing reserve goal          50,000,000kl (achieved Feb. 1998)       70 days of domestic consumption
Storage place                  National stockpile base, private        Refinery, private tanks , oil tankers
                               tanks
Holding format                 The “Sealed method”                     Held in the distribution process
Maintenance etc.               After the oil has been separated by     Crude, gasoline, kerosene, gasoil and
                               type, the tank is sealed, and managed   fuel oil are held by type in accordance
                               as property.                            with standard holding volume criteria.
                                                                       But, with the Minister of METI’s
                                                                       approval, the types of oils held may be
                                                                       substituted.
5.Implementation system of Government Stockpiling

               METI                                                                    JNOC
 •Stockpiling policy formulation                             •Planning of implementation of government stockpiling
 •Coordination within the government
                                                             •Management of 8 national oil-stockpiling companies
 •Decision making of draw down
 •Ensuring budget for stockpiling                            •Coordination & consultation with METI


               8 National Oil-Stockpiling Companies (Headquarters)
                    Equity capital: 70% JNOC and 30% private company (*Note)
        • Construction of oil-stockpiling bases
        • Management of implementing oil stockpiling
        • Planning of each fiscal year’s stockpiling activities
        • Meet with JNOC, to get approval for the companies’ budget and activities each fiscal year
        • Management of national oil-storage bases


                                 10 National Oil-Storage Bases
         •Management of stockpile oil
         •Management & maintenance of oil-storage base facilities
         •Inspection of oil-storage tanks
         •Safety & disaster prevention training
 Note: In order to achieve completion of reserve bases In the shortest time possible and to achieve maximum utility and
       functioning of the bases by efficiently utilizing public refineries' human and technological resources, petroleum
       refineries were selected to be the central stockholders at JNOC.
6. Petroleum storage method
Storage method                  Advantages                              Disadvantages                    National bases

Above ground tanks   - Low construction cost                     - Takes up space/ A large amount    Mutsu-ogawara, Fukui,
                     - Technically simple to construct             of land is necessary              Tomakomai-tobu, Shibushi
                     - The risk of large scale leak seepage is   - Compared to above ground tanks,   Akita
                       low                                         construction costs are high.
                     - Because the distance needed between
In ground tanks
                       tanks is minimal, a more efficient use
                       of space is possible. (Since there are
                       no depth limitations, they can store 3
                       times the volume as above ground
                       tanks)
                     - Extremely earthquake resistant.
                     - Blends into the landscape.
                     - Underground temperatures stabilize at     - Compared to above ground tanks,   Kuji, Kikuma,
                       9℃ , so that there is no need for           construction costs are high.      Kushikino
                       humidification, thus saving energy
Underground tanks      (costs).
                     - Very little land is necessary.
                     - Very resistant to natural disasters
                       (earthquakes, lightening etc.)
                     - The risk of large scale leak seepage is
                       low.
                     - Blends into the landscape.
Floating tankers     - Land acquisition is unnecessary.          - Compared to above ground tanks,   Shirashima
                                                                   construction costs are high.      Kamigoto
7. Financial figure of petroleum stockpiling


  Special account of METI *           Government fund            Commercial banks

    Capital          Interest     Loans       Principal and       Loans   Principal and
    financing        subsidies                Interest payment            Interest payment


                                                                                             Downstream
                                       JNOC                                                   companies
                  Capital financing
                  Loans                          Principal payment                      Capital
                  Land leasing                   Leasing fee for land                   financing
                  Base usage fee

                      National petroleum and petroleum gas stockpiling companies



                                           National Reserves


    * Shifting of energy source consumption Account
8. Concrete Methods of Oil Reserve & Drawdown (1/2)


(1) First Use National Reserve should be Carried Out by JNOC
       Can Expect an Announcement Effect, Especially in the
        State of Pre-Emergency or CERM



       1st Stage                2nd Stage               3rd Stage
 • Drawdown of National
   Reserve                • Drawdown of Private   • Massive Drawdown
 • Reduction of Private     Reserve                 of National Reserve
   Reserve Obligation
9. Concrete Methods of Oil Reserve & Drawdown (2/2)


(2) Drawdown Objectives:
       Oil Refiners
                                                Prevention of
                                                 Speculation
(3) Drawdown Proceedings:
       Bidding is the Standard Procedure
                                               Use of Market
                                                Mechanism
(4) Drawdown Manual:
       METI/JNOC have Created a new Drawdown Manual

				
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posted:9/22/2012
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