JXTG Holdings, Japan’s biggest oil refiner, said on Tuesday it plans to close a 115,000 barrel per day (bpd) Osaka refinery that it owns with PetroChina next year, amid falling demand for crude products in Japan.
The closure will cut Japan’s refining capacity to just over 3.4 million bpd, down from 5.6 million bpd in the 1980s when Japan accounted for almost 10 percent of global oil product output.
Four of Japan’s biggest refiners have merged into two in recent years and cut operations as they seek business from a shrinking, aging population that consumes less fuel because of more efficient vehicles and gasoline-electric hybrids.
“In light of the increasingly severe business environment, (JXTG) has decided to terminate refinery operations at the Osaka refinery,” the company said in a statement, citing declining domestic demand as well as competition in Asia.
The refinery will be shut in October next year, a month after the expiry of JXTG’s venture with PetroChina, and the site will be converted to an asphalt-fueled electric power station, JXTG said.
