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Korea National Oil Corp.(KNOC) plans to begin work on a new oil storage and trading hub in Ulsan, its chief executive officer said.

CEO Suh Moon-Kyu is quoted by The Wall Street Journal as saying that the hub will be a 'very important project' for both the city of Ulsan and for the company.

"Foreign oil majors and trading companies will surely want to use the hub," Mr. Suh said, adding that Vopak, Gazprom Neft, BP and Bank of China had already expressed interest in investing in the project.

KNOC said the hub will consist of two terminals and have a total storage capacity of 28.4 million barrels, including a 9.9 million barrel terminal for petroleum products and an 18.5 million-barrel terminal for crude oil.

Plans to start work on the KRW1.6 trillion ($1.4 billion) project are expected to begin next year. The facility for petroleum products is scheduled for competion in 2016.

Mr Suh said commercial operations at an 8.2 million-barrel oil terminal in Yeosu are expected to begin in March.

KNOC has a 29% stake in the terminal. China Aviation Oil Corp. has a 26% stake. SK Energy Co. and GS Caltex Corp. each hold an 11% stake.