by Andreas Exarheas | Rigzone Staff | Thursday, June 04, 2020
The U.S. Department of Energy revealed Wednesday that the United States has finalized a Strategic Petroleum Reserve (SPR) lease agreement with Australia.
The deal, which was signed by U.S. Secretary of Energy Dan Brouillette and Australia’s Minister of Energy and Emissions Reduction Angus Taylor in a virtual ceremony, will allow Australia to lease space in the U.S. SPR to store Australian-owned oil and access this oil during an emergency.
According to the DOE, the agreement stems from discussions between U.S. President Donald J. Trump and Prime Minister Scott Morrison in Washington in September 2019. This is the first time the U.S. has leased excess capacity in the SPR to another country.
“Both ministers acknowledged the change in the energy landscape over the past few months, and how the Covid-19 pandemic has reiterated the importance of energy security and the strong U.S.-Australia relationship,” the DOE said in an organization statement, which was posted on its website.
“[The] agreement will deepen that relationship, advance the strategic interests of both nations, and strengthen global energy stability. It will also allow Australia to make progress on their sovereign energy goals and benefit from current low oil prices,” the DOE added.
Brouillette and Taylor stated that the agreement is a lasting sign of the U.S.-Australia partnership in energy security through both times of crises and times of prosperity, according to the DOE.
The SPR is the world’s largest supply of emergency crude oil and was established primarily to reduce the impact of disruptions in supplies of petroleum products and to carry out obligations of the United States under the international energy program, the DOE states on its website.
The SPR, which comprises several underground salt caverns at four major oil storage facilities, is said to have an authorized storage capacity of 714 million barrels.
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