November 1, 2010 / 4:26 AM / 9 years ago

UPDATE 2-Japan's JX, Fuji Oil scrap CDUs -trade ministry

 * JX, Fuji can CDUs as refiners look to meet new regs
 * Rules say refiners must boost ability to process heavy oil
 * JX shuts two CDUs at Negishi refinery -trade ministry
 * AOC’s Fuji unit closes long-idled CDU east of Tokyo
(Recasts, adds info on JX, ministry comments)
 By Osamu Tsukimori
 TOKYO, Nov 1 (Reuters) - Japanese oil refiners JX Nippon Oil & Energy Corp and Fuji Oil have both scrapped crude distillation units (CDUs), a trade ministry official said on Monday, as they look to meet regulations calling for drastic steps to boost refining efficiency.
 Japanese refiners have also been cutting capacity in response to declining demand from an ageing population and a rapid shift into more efficient energies.
 The country’s crude refining capacity has declined by 122,000 barrels per day to 4,516,424 bpd as a result of the moves, a trade ministry official said.
 JX Nippon Oil & Energy, Japan’s top refiner and a wholly owned unit of JX Holdings (5020.T), on Oct. 31 shut the 70,000 bpd No.2 CDU and the No.3 CDU, which at the time had a capacity of zero, at its Negishi refinery.
 Fuji, a wholly owned unit of AOC Holdings (5017.T), on Oct.29 scrapped the idled 52,000 barrels per day No.1 CDU at its Sodegaura refinery, east of Tokyo.
 The new ministry rules call for refiners to ramp up their ability to process heavy oil into lighter oil products by March 2014 by either building new residue cracking units or scrapping refining capacity. Industry watchers have said only the latter looks feasible.
 For related analysis and Q+A on the METI regulations, and a list of heavy oil cracking units, click: [ID:nTOE67G04Z] [ID:nTOE63D02L] [ID:nTOE66Q059]  (Reporting by Osamu Tsukimori; Editing by Joseph Radford)     

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