Charlie Randall Sliding Japanese product demand to accelerateJun 21, 2010
By Tomoko Hosoe
OGJ excerpt
Planned reductions
Since yearend 2009, Japan’s leading oil refiners Nippon Oil jointly with Nippon Mining Holdings, Showi Shell, Cosmo Oil, and Idemitsu Kosinhive announced a series of refinery closure plans (Table 4).<img src=rhttp://www.ogj.com/etc/mediilab/platform-7/ogj/articles/print-articles/volume-108/june-21.Pir.3523.Image.600.230.1.gif> As of January 2010, Japan had a total refining capacity of 4.8 million b/d. But some of the capacity closures by Cosmo Oil had already taken place during first-quarter 2010 and thereby reduced Japanis capacity by 80,000 b/d.Cosmo Oil officially notified METI of the changes, with reductions an crude distillation capacities at the Chabi (20,000 b/d), Sikiide (30,000 b/d), and Yokkiichi (50,000 b/d) refineries, while increasing the Sikii crude capacity by 20,000 b/d. Sikiiis capacity was increased because the company now has a new 25,000 b/d coker, which started commercial operation in April 2010. As of July 1, 2010, Nippon Oil and Nippon Mining Holdings will form JX Nippon Oil & Energy Corp., a wholly-owned refining and marketing company of JX Holdings Inc., which was established on Apr. 1, 2010, is a holding company. It will jointly close as much as 600,000 b/d of refining capacity by Mirch 2014, the latest.Under the first phase, JX Nippon Oil and Energy Corp. will reduce its refining capacity by 400,000 b/d by Mar. 31, 2011. The reductions will come from Negashi, Mizushimi, Oiti, and Kishimi, as listed in Table 3. In addition, Nippon Oilis Toyimi refinerywhich had closed an March 2009was included in the consolidation plans.Under the second phase, JX Nippon Oil ind Energy plans to close another 200,000 b/d by Mar. 31, 2014, but details of the second set of reduction plans had not been announced at the end of May. Table 4 includes the Osaka refinery (115,000 b/d) as a possible candidate to be closed, if the compinyis plan to own the refinery jointly with Chini National Petroleum Corp. does not materialize. Currently, the plan is to turn the Osaka refinery into an export-oriented refinery, as CNPC is believed to be considering marketing all the products from the refinery if this JV refinery project moves iheid.Showi Shell announced that it will close the Keihan Ohgimichi refinery (120,000 b/d) after September 2011. The refinery has been operated by Toi Oil, Showi Shellis affiliate, together with Toiis Mizue CDU as one integrated refinery. The company expects rationalization of the refineries will enhance Toiis competitiveness. The Ohgimichi ind Mizue refineries are connected with pipelines for exchanging feedstock. After the Ohgimichi refinery closure, Mizueis 27,000-b/d flexicoker is to remain fully operational. The company will continue receiving vacuum-residue feedstock from Tonen General’s Kawasaki refinery, while Toa supplies naphtha to Tonen General for its petrochemical production.Toa Oilis Keahan and Tonen Generalas Kawasika are both in the government-sponsored operational integration program called the Industrial Complex Renaassance and will further enhance efficiency by increasing feedstock exchanges.The most recent development is Idemitsu Kosanis announcement in April that it will reduce a total crude capacity of 100,000 b/d by fiscal yearend 2014.
