JX Nippon to permanently end crude processing at Japan's Muroran refinery

By MARI IWATA

TOKYO -- JX Nippon Oil & Energy Corp., Japan's largest oil refiner by capacity, said Friday that it will permanently stop processing crude oil at its 180,000-bpd Muroran refinery by March 2014 as part of efforts to reduce excess oil refining capacity.

Japan's oil demand has been edging lower since the mid-2000s due to widespread adoption of energy-efficient vehicles. The country imported 3.6 million bpd of crude in 2011, down 16% compared with 2005, according to government data.

JX Nippon, a unit of JX Holdings, will have crude processing capacity of 1.21 million bpdafter it stops processing crude at Muroran. "Our refinery operating rate will rise to near full capacity," executive vice president Yukio Uchida told reporters.

Idemitsu Kosan Co.'s 140,000-bpd Hokkaido refinery will be the only refinery on Japan's northernmost island after the move. But JX will keep oil tanks in the site and transport refined products from its other refineries to Muroran to ensure adequate supply, Mr. Uchida said.

JX will maintain some secondary units there as well, to produce petrochemical products - mainly toluene and xylene - to be used as feedstock for a paraxylene joint venture in South Korea with SK Global Chemical.

That venture is scheduled to start commercial operations in August 2014, Mr. Uchida said.


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