Japan's Operating Refineries Pick Up Slack from Lost Production

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Written by Gordon Murray, Managing Director of Industrial Info Resources East Asia (Kofu-shi, Japan)--Following the destruction caused by the magnitude 9.0 earthquake, Japan's oil refining capacity has been significantly crippled by damage to Cosmo Oil Company's (TYO:5007) (Tokyo) 220,000-barrel-per-day (BBL/d) Chiba refinery and JX Nippon Oil's (Tokyo) 145,000-BBL/d Sendai refinery. At the time of writing, fires have not been extinguished at Cosmo Oil's Chiba refinery, but had been put out at JX Nippon Oil's Sendai refinery.

The following refineries were shut down for damage assessment following the earthquake and tsunami:

• JX Nippon Oil's Kashima refinery, which has a nameplate production capacity of 252,000 BBL/d, but was producing between 190,000 BBL/d and 200,000 BBL/d prior to the quake


• Kyokuto Petroleum Industries' Chiba plant, which has a total production capacity of 175,000 BBL/d


• JX Energy's Negishi refinery, which has a production capacity of 270,000 BBL/d


• Exxon Mobil Corporation's (NYSE:XOM) (Irving, Texas) 335,000-BBL/d Kawasaki refinery

Prior to the March 11 earthquake, Japan-based refining companies with fully functioning refineries had been running at less-than-full capacity because of low demand. Due to supply problems caused by damage to Cosmo's Chiba refinery and JX Nippon Oil's Sendai refinery, as well as the lack of production from the Kashima refinery (JX Nippon Oil) and Kyokuto Petroleum's Chiba refinery, Japan's other refineries are ramping up production in order to meet demand.

Currently, IIR has researched and confirmed the following changes in production:

• Nishihara refinery, owned by Petrobras (NYSE:PBR) (Rio de Janeiro)/Nansei Sekiyu - previous levels of production prior to the earthquake were 60,000 BBL/d, but have now increased 24% to 74,400 BBL/d. The refinery's maximum production capacity is 100,000 BBL/d. The owners are considering increasing to maximum production, but have not made any firms plans yet.


• Sakai refinery, owned by Tonen General Sekiyu (TYO:5012) (Tokyo) - full production capacity is 156,000 BBL/d; current production is 100,000 BBL/d. The current plan is to increase to full capacity "as soon as possible," although a firm date has not been decided.


• Cosmo Oil's Sakai refinery - currently running at full capacity of 100,000 BBL/d.


• Idemitsu Kosan's (TYO:5019) (Tokyo) Chiba refinery - producing at full capacity of 220,000 BBL/d as of March 15. Prior to the quake, Idemitsu Chiba was producing about 160,000 BBL/d.


• Kyokuto's (a subsidiary of ExxonMobil) Chiba refinery was shut down briefly following the quake. However, as of March 16, it has returned to full capacity of 175,000 BBL/d.


• Tonen General Sekiyu & ExxonMobil's Wakayama refinery was producing 130,000-BBL/d prior to the earthquake, but is now producing at full capacity of 170,000 BBL/d.


• JX Nippon's Negishi refinery was producing 230,000-BBL/d prior to the earthquake, but was shut down for inspection when the disaster occurred. Restart has been announced for early next week (firm date undetermined as of March 17). The refinery will restart at the same rates prior to the quake. Full production capacity is 270,000 BBL/d, but this level of production is not yet possible, due to units that will still be offline upon restart.


• Fuji Oil's (Tokyo) Sodegaura refinery is currently running at full capacity of 140,000 BBL/d.


• ExxonMobil's Kawasaki refinery, which was shut down for inspection following the quake, will attempt to restart and return to full capacity of 335,000 BBL/d.


• Toa Oil's (TYO:5008) (Tokyo) Keihin refinery, which has a full production capacity of 185,000 BBL/d was not affected by the quake and is currently running at a rate of 170,000 BBL/d. Toa Oil stated that they will push production up to full capacity "soon," most likely in the next few weeks.


• Aichi (Idemitsu) was unaffected by the quake and is currently producing between 140,000 and 150,000 BBL/d. Full capacity is 160,000 BBL/d.


• Cosmo Oil's Yokaichi refinery is currently running at full capacity of 125,000 BBL/d.


• Showa Shell Sekiyu's (TYO:5002) (Tokyo) Yokaichi refinery is currently running at full capacity of 210,000 BBL/d.


• Seibu Sekiyu's Yamaguchi refinery is currently running at 90,000 to 100,000 BBL/d and is considering increasing to full capacity (120,000 BBL/d). However, no firm plans have been made yet.


• JX Nippon's Muroran refinery is currently running at full capacity of 180,000 BBL/d.


• Idemitsu's Hokkaido refinery is running as normal, with a current production level of 100,000 to 110,000 BBL/d. Full capacity is 140,000 BBL/d. Currently, there are no plans discussed to increase current levels of production.


• JX Nippon's Marifu refinery is currently running at full capacity of 145,000 BBL/d.


• JX Nippon's Oita refinery was producing at 90,000-100,000 BBL/d, but is now running at full capacity of 136,000 BBL/d.


• Taiyou Oil's Shikoku refinery is currently running as normal, at a rate of between 110,000 and 120,000 BBL/d. Maximum capacity is 120,000 BBL/d.


• Cosmo Oil's Sakaide refinery began running at full capacity of 110,000 BBL/d on March 16. Prior to this, the refinery was producing 90,000 BBL/d.


• Idemitsu's Tokuyama refinery is currently running at full capacity of 120,000 BBL/d. The refinery was running at 90,000 BBL/d prior to the earthquake.


• JX Nippon's Mizushima refinery (maximum capacity of 380,200 BBL/d) was not affected by the earthquake and has started maintenance turnarounds as scheduled. Area A's capacity is 140,000 BBL/d and Area B's capacity is 205,200 BBL/d. Both are currently running at full capacity. However, as of March 22, Area B's capacity will be reduced by 110,000 BBL/d as Crude Distillation Unit 3 will be taken offline for scheduled maintenance for about 40 days.


• JX Holdings' Osaka-kokusai-sekiyu-seisei Osaka refinery was not affected by the earthquake and is currently completely down for maintenance turnarounds. The refinery will return to full production capacity of 115,000 BBL/d on April 12.

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