The US will fund the construction of a strategic petroleum reserve in Darwin, Australia's most northern city, where the US military has a base for 2,500 troops.
It follows an agreement struck earlier this year between the two countries for Australia to lease storage lease space at the US Strategic Petroleum Reserve (SPR) to store and access oil during a global emergency.
The SPR lease, together with Canberra's plans to purchase oil to store in the SPR, are part of the Australian government's plans to meet its obligation to the IEA as Australia has been non-compliant with its 90-day stocks obligation since March 2012.
The nearest refinery in Australia to Darwin is 3,400km away in Brisbane, Queensland with the 109,000 b/d Lytton refinery.
