Becoming one of the world's major oil trading and storage hubs is what Korea is aiming for.
Trade and energy minister Yoon Sang-jick said Wednesday that 1.8 billion U.S. dollars in private sector investment will go into securing oil storage terminals that can hold nearly 60-million barrels of oil.
The government says it wants this complete by the year 2020.
"Geopolitically, Korea connects China and Japan, has world-renowned refineries as well as good port facilities. That's why it is seen as the best spot for a new oil hub."
An annual oil trading volume of 25 billion dollars is expected to be generated from 2021 under the plan.
Many billion dollars worth of economic benefits are expected in the next several years. The government hopes the terminals, planned to be expanded in the country's southern cities of Ulsan and Yeosu will help the country serve as a major oil trading hub.
Policymakers plan to offer favorable loans, tax breaks and other incentives to oil traders setting up operations here as well as eliminating red tape to create a better trading environment in the country.
But some industry experts point out that the success of the government project will depend largely on the difficult task of building the financial infrastructure for the trading system.
A researcher at the Korea Energy Economics Institute told Arirang News that one of the main problems is that the Korean won is not a major currency used in international trade adding that reaching the government's goal of making Korea Northeast Asia's main oil hub could take well over a decade.
Laah Hyun-kyung, Arirang News.