The original plan envisaged building 4 million barrels of storage for clean products and 2 million bbl for dirty products and crude, but shareholders are mulling raising the combined capacity to 8.9 million bbl with 31 tanks, a source close to the project said. In May, shareholders will decide the volume of storage capacity and number of tanks to be built, he added. Construction would start in early September once the government gives approval, which is expected by the end of August. “We are overbooked by traders. But local refiners are reluctant to expand due to weak refining margins,” said the source, who was referring to SK Energy and GS Caltex which each hold an 11% interest in Oiltanking KNOC Yeosu. The other shareholders are storage operator Oiltanking (34%), local state firm Korea National Oil Corp. (KNOC) (29%) and trader Glencore (15%) (IOD Mar.16,p6). The Yeosu terminal would also accommodate four berths to receive regular tankers. Terminal users would co-share KNOC’s existing berth, which can handle very large crude carriers. Construction is to be completed by the end of June, 2012. The joint-venture firm is still in the process of selecting a local turnkey contractor. The Yeosu terminal will be the first commercial storage investment for KNOC after its crude stockpiling initiative, launched a few years ago, attracted strong interest from major crude suppliers. KNOC aims to develop the terminal into an oil trading hub in northeastern Asia and leverage on arbitrage opportunities with the Pacific coasts of the Americas by breaking bulk to the markets in Japan and China. The firm is already in the process of working on a master plan for a second storage terminal which would be located at another refining site in Ulsan. Asia has been experiencing a surge in demand for petroleum storage that could not be met by existing capacity. Many players, including traders, are looking at building terminals in nearby Malaysia due to land scarcity in Singapore. Earlier this week, Malaysia’s Langsat Terminal-1, partly owned by Swiss trading giant Trafigura, announced plans to boost its storage capacity at its newly opened terminal in Tanjung Langsat in the southern part of the country