S-Oil: Signed 20-Year Long-Term Crude Supply Deal With Saudi Aramco
Friday, 10 February 2012 | 00:00
S-Oil Corp., South Korea's third-largest oil refiner, said Thursday that it has signed a 20-year crude-oil supply contract with Saudi Arabian Oil Co.
Under the deal, Saudi Aramco will supply around 230 million barrels to S-Oil annually, S-Oil said in a statement. S-Oil has a refining capacity of 669,000 barrels a day.
It didn't provide the value of the supply deal.
The deal will help enable S-Oil to secure a stable supply of enough crude oil "to run its refinery for the next 20 years," S-Oil said in the statement.
The deal will also ensure supply stability for S-Oil in the face of international sanctions against Iran's oil industry and Iran's threats to block the Strait of Hormuz in retaliation, an unnamed S-Oil official was quoted as saying in the statement.
A 20-year supply deal is highly unusual and was made possible because of the mutual trust the two companies had developed over more than 20 years of relations, the statement said.
Saudi Aramco has maintained long-term relations with S-Oil ever since it decided to invest in S-Oil in the form of a joint venture in 1991, S-Oil said.
Source: Dow Jones
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