Eric Watkins
Senior Correspondent
LOS ANGELES, May 8 -- Nippon Oil Corp. and China National Petroleum Corp. have agreed to jointly manage the existing Takaishi refinery in Osaka province and to export its products to China and other regional markets.
Nippon Oil Chairman Fumiaki Watari and CNPC Pres. Jiang Jiemin signed the agreement, giving the Japanese firm a 51% stake in the venture and CNPC the remaining interest.
Under the plan, joint management will help Nippon Oil raise capacity utilization at the 115,000-b/d refinery, while enabling CNPC to strengthen its ability to procure oil products.
The Takaishi facility, the sixth-largest among Nippon Oil's seven domestic refineries, has seen its capacity utilization fall sharply due to slumping demand in Japan for such refined products as gasoline, gas oil, and fuel oil.
Demand for these products has been surging on the back of strong economic growth in China, where refineries are having difficulty keeping up with the growth.
Under an earlier agreement signed by the two companies in 2004, Nippon Oil started shipping oil products from its domestic refineries to China. The Japanese firm now refines 70,000 b/d for export to China under that agreement.
Contact Eric Watkins at [email protected].
