JAPAN DISASTER: JX Nippon, Cosmo Oil raise refinery operating rates

18 March 2011 13:11  [Source: ICIS news]

SINGAPORE (ICIS)--Japanese refiners JX Nippon Oil & Energy and Cosmo Oil have raised production at their refineries in western Japan by a combined total of around 110,000 bbl/day in order to alleviate oil product supply shortages resulting from the recent earthquake, officials said on Friday.

JX Energy said it raised production at its 136,000 bbl/day Oita refinery and its 380,200 bbl/day Mizushima refinery, by a combined total of 30,000 bbl/day. Meanwhile, Cosmo Oil has raised output at its 125,000 bbl/day Yokkaichi refinery and 110,000 bbl/day Sakaide refinery by 50,000 bbl/day and 30,000 bbl/day respectively.

Four refineries with a total capacity of about 887,500 bbl/day remain shutdown following the earthquake on 11 March. These include three refineries owned by JX Energy - the 145,000 bbl/day Sendai refinery located in the Miyagi prefecture in northeast Japan, the 252,500 bbl/day Kashima refinery in Ibaraki prefecture and the 270,000 bbl/day Negishi refinery in Kanagawa prefecture just south of Tokyo.

However, JX Energy plans to restart the Negishi refinery next week and restarted tank truck deliveries from the refinery on Thursday, company officials said. No restart dates for the Sendai and Kashima refineries have been released as both the refineries are damaged and port facilities remain closed.

The fourth refinery, Cosmo Oil’s 220,000 bbl/day Chiba facility, is still shutdown as it remains on fire, the company official said on Friday. The fire started following an explosion of liquefied petroleum gas (LPG) tanks at the refinery an hour after the 9.0-magnitude quake struck northeastern Japan.

Two other refineries have resumed operations in recent days, after being shutdown in the aftermath of the earthquake.

TonenGeneral Sekiyu restarted its 335,000 bbl/day Kawasaki refinery on Thursday. The company expects the plant to reach full production by Friday. Another Japanese refiner, Kyokuto Petroleum Industries (KPI), restarted its 175,000 bbl/day refinery at Chiba on Wednesday and expects to reach full production in the next few days.

ExxonMobil holds a 50.2% share in TonenGeneral, and a 50.0% stake in Kyokuto Petroleum Industries (KPI).

A total of six refineries with a total capacity of 1.4m bbl/day - around 30% of Japan’s total - were shutdown following the earthquake, according to data from the International Energy Agency (IEA).

The IEA's data also shows that Japan is the world’s third largest consumer and importer of oil, with the country’s oil demand in 2010 totalling some 4.42m bbl/day, around 5% of global demand. Japan imports around 97-99% of its oil requirements due to limited domestic oil production and reserves.

The country’s total refining capacity stands at some 4.52m bbl/day, according to data from the Petroleum Association of Japan (PAJ). In 2009 Japan accounted for some 5.1% of global refining capacity, according to data from BP.

Data from the PAJ the week prior to the earthquake showed that Japan’s refineries were operating at 86.5% of total refining capacity, based on barrels per calendar day.

For the latest news on the Japan disaster

By: James Dennis
+65 6780 4359

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