Japan Disaster: Immediate Petchem, Refining Impact



By John Richardson

THE earthquake and tsunami that hit Japan on Friday afternoon is still hard to take in. We send our sympathy to everyone connected with this disaster and just hope and pray that the rescue efforts go exceptionally well.

As Japan returns to work this morning it will confront the huge cost of rebuilding at a time when its economy is struggling with slowing growth and lack of confidence in the government.

But this is a country that has overcome huge obstacles in the past and we are sure that history will repeat itself.

It seems almost in bad taste to talk about the impact on refining and petrochemicals, but of course life has to go on.

And so we have been trying to piece together the impact on these two industries both in Japan and elsewhere.

Petrochemicals plants at Ichihara, Chiba prefecture, and Sendai, Miyagi prefecture were reported to be still on fire 15 hours after the disaster occurred.

Chisso Corp’s Goi Complex, which includes polyethylene (PE) and polypropylene (PP) plants, is at Ichihara.

Maruzen Petrochemical shut down its 480,000 tonne/year crackert at Chiba, east of Tokyo, after the earthquake.

Keiyo Ethylene shut is 690,000 tonne/year cracker at Chiba.

Keiyo Ethylene Co is 55 percent-owned by Maruzen Petrochemical and 22.5 percent each by Mitsui Chemicals and Sumitomo Chemical.

Idemitsu Co, Showa Denko and Mitsubishi Chemical are also reported to have closed down plants in order to carry out test.

Some 1.7m tonne/year of ethylene capacity is thought to be off-line.

There was also a fire over the weekend at the chemical factory of JFE Chemical in the Chuo ward in the city of Chiba, Chiba prefecture.

JFE Chemical produces coal tar, benzene, toluene and xylene and industrial gases including oxygen, nitrogen and argon.

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

Around 1.2m tonne/year of refinery capacity is thought to be also shut down. These include three JX Holdings refineries, one refinery operated by Cosmo Oil, another by TonenGeneral Sekiyu and a final one run by Kyokuto Petroleum.

The 220,000 tonne/year Cosmo refinery, which is at Ichihara, was reported to be on fire.

Japan is a major importer of naphtha and so crack spreads elsewhere will be under downward pressure due to the drop in demand.

Ten naphtha vessels were said to be heading from Europe to Japan when the disaster happened.

This could add further length to a European market that was already struggling to cope with oversupply.

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