INAJIMA and YUJI OKADA
(Bloomberg) -- Three Japanese oil refiners and
trading firm Sumitomo Corp. said they plan to merge their
liquefied petroleum gas (LPG) import and wholesale operations
in a move that would give them the largest share of the market
for the fuel in the country.
refinersCosmo Oil Co., TonenGeneral Sekiyu KK and Showa
Shell Sekiyu KKand Sumitomo plan to reach a basic
agreement by June 2014, and set up a joint venture by December
2014, they said in a joint statement today.
are under pressure as demand for the fuel weakens because of
energy-saving efforts and competition with electricity and city
gas. Demand for the fiscal year ending March 2015 is expected
to fall 0.6% to 17.5 million metric tons (metric MMt) from a
year earlier, an advisory panel to the Ministry of Economy,
Trade and Industry said in a June report.
venture will have revenues of about 400 billion yen ($3.8
billion) and domestic LPG sales of about 3.6 MMt per year, they
said. It would control about 26% of Japan's LPG wholesale
have not decided the size of the stakes they will own in the
venture, said Kentaro Take, manager of TonenGeneral's demand
and supply division. The Nikkei newspaper reported on Dec. 21
that the four companies will each have 2%.
12.6 MMt, or 77.6% of its LPG requirements, in the year ended
March 2012, the Japan LP Gas Association said in a February
report. The country's LPG demand peaked at 19.7 MMt in fiscal
1996, according to data compiled by the association.
Cosmo Oil, Showa Shell and Sumitomo agreed to consider the
merger of their LPG retail operations by the end of December
next year, they said in a joint statement. The planned retail
venture will have sales of about 60 billion yen and 240,000
customers, they said.