UpdateMassive quake disrupts Japan petchem ops, shuts ports

11 March 2011 10:34  [Source: ICIS news]

Earthquake, 8.9 on Ricter scale, hits Japan creating powerful tsunamis(adds port closures and details throughout)

By Pearl Bantillo

SINGAPORE (ICIS)--A massive earthquake - the largest to hit Japan in centuries - disrupted the country's petrochemical operations and forced closures of all its ports on Friday.

At least 10 people were killed based on the latest media reports, with the death toll expected to rise as Japan’s coast was inundated by tsunami of up to 10 metres high following the quake, with strong aftershocks felt in the northern parts of the country.

The quake struck Japan’s northeast coast, some 373 kilometres northeast of Tokyo, and 81 miles east of Sendai, Honshu – the largest island in the country, according to the US Geological Survey (USGS).

USGS earlier put the magnitude of the quake on the Richter scale at 7.9 but revised it up to 8.8, then to 8.9.

Countries in the Pacific basin including the Philippines, Taiwan, Indonesia, Papua New Guinea and Hawaii, among others, raised tsunami warnings following Japan’s major temblor.

In Japan, fire erupted at a refinery at Ichihara in the Chiba prefecture, said a source from Mitsubishi Chemical.

Chiba prefecture is one of Japan’s petrochemical hubs.

JX Nippon Oil & Energy shut its paraxylene facilities in Kashima, with a combined capacity of 600,000 tonnes/year and in Kawasaki with a combined capacity of 350,000 tonnes/year, market sources said.

Meanwhile, a source close to the company said that three of JX Nippon Oil’s refineries were down - a 145,000 bbl/day unit at Sendai in Miyagi prefecture, a 189,000 bbl/day crude oil refinery at Kashima in Ibaraki prefecture and a 270,000 bbl/day unit at Negishi, Kanagawa prefecture.

The quake and the tsunami that followed downed phone lines and caused power outage in parts of Japan, making it difficult to check on operations of other petrochemical plants.

“It [quake] is a big one this time and quite bad. We don’t know the extent of the damage yet and will have to wait and see. But all petrochemical plants will obviously have to stop operating,” said a trader from Marubeni.

Tokyo Electric Power also shut down its Fukushima Daiichi Nuclear Power Plant (NPP) reactors with capacities of 460 megawatts and 784 megawatts. It also shut its Fukushima Daini reactors with a combined capacity 1.1-gigawatt reactors because of the quake.

The Fukushima prefecture is located near the epicentre of the earthquake.

Japan’s major quake sent stock markets in Asia falling, as the natural disaster compounded investors' concerns over Saudi Arabia's unrest.

In China, the Shanghai Composite Index slipped 23.35 points or 0.79% at 2,933.80. In Hong Kong, the benchmark Hang Seng index declined 365.11 points or 1.55% at 23,249.78.

Taiwan’s stock market index was down 75.08 points or 0.87% at 8,567.82.

Japan’s stock market index – Nikkei 225, which closed just after the massive earthquake occurred, also shed 179.95 points or 1.72% at 10,254.43.

Crude and naphtha prices also fell as focus of energy players was temporarily diverted from supply concerns because of ongoing political upheavel in parts of the Middle East and north Africa.

At 09:40 GMT, light sweet crude for April delivery was down 66 US cents at $102.04/bbl, while Brent crude fell $1.52/bbl to $113.91/bbl.

Naphtha prices, meanwhile, plunged below $1,000/tonne (€730/tonne) to $989-991/tonne CFR Japan at the close of trading on Friday, on concerns that cracker operations in Japan had been affected, market sources said.

($1 = €0.73)

Additional reporting by Mahua Chakravarty, Clive Ong, Helen Yan, Felicia Loo, Bohan Loh, James Dennis, Tahir Ikram, Nurluqman Suratman, Becky Zhang and Peh Soo Hwee

By: Pearl Bantillo
+65 6780 4359

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