Page 11 - AsianOil Week 46 2021

AsianOil EAST ASIA AsianOil

Winter worries lead to an increase

in refinery output in Japan

PROJECTS & ON the back of ongoing supply issues facing the
COMPANIES global oil industry, Japan’s Idemitsu Kosan, the
second-largest refiner in the country, has said
it will meet demand over the coming winter
months by way of output instead of its more typ-
ical import-based supply system.
The Tokyo-based giant in fuel supplies to
thermal power generators around Japan made
the announcement on November 12 in spite of
a number of record-breaking demands from
domestic utility companies, with an Idemitsu
spokesman saying: “We will supply our own
produced product.”
Just days earlier the company had commen-
surately announced its intent to increase the run
rates at its refineries to more than 80% across the
period October to March, the second half of the
Japanese fiscal year.
This will in part allow for supply requests
to be met by the company, but also, in March
should the weather turn warmer and requests
drop off, to replenish supplies.
The boost in Idemitsu run rates will thus see
numbers increase from the April-to-September
half-year by 7%; a period which itself saw lower
output as a result of ongoing routine mainte- approaching 1.3mn barrels. A month later as the
nance issues, according to the company. weather warmed significantly fuel oil imports
In revealing the plan to increase run rates, failed to reach even 150,000 barrels.
company president and CEO Shunichi Kito Referring back to last winter, Kito said: “At the
did refer to the stresses felt after excessive beginning of this year, when power (supplies)
supply requests last winter, saying: “Amid tightened, a very challenging moment arrived
power shortage concerns this winter, power all of a sudden,” continuing, “(Following) such
utilities are considering early procurements. events, power utilities are preparing early in this
(We) have also received supply requests from fiscal year, and we are also securing vessels as
a couple of power utilities at roughly double part of early preparations to avoid great confu-
the level of last January to February, [which] sion and maintain stable supply.”
we are considering fulfilling firmly,” according Making no promises, Kito went on to say:
to reports. “However, we cannot (this year) predict the
Last winter, refineries in Japan increased degree of power (supply) tightness.”
overall supplies on the back of a lengthy period Idemitsu’s largest rival, and the biggest refiner
of intensely cold weather, and a request from the in Japan, ENEOS, meanwhile, has also indicated
nation’s Federation of Electric Power Companies it is receiving increased supplies requests.
of Japan. ENEOS president Katsuyuki Ota was
Reduced LNG supplies at the time could reported as saying late last week: “(We) are
again pose a problem this winter, with supplies receiving a considerable volume of inquiries
already low according to some analysts. Issues from power utilities for the coming winter.”
should not be exacerbated further, however, Like Kito’s comments, those of Ota highlight the
by the then limited output at coal, oil-fired turn away from LNG and newer forms of energy
and nuclear power plants (NPPs) that led to supply in Japan when reliability is at stake, with util-
the state of emergency seen in late 2020 and ities so often depending on refineries to plug gaps;
early 2021. Ota at least has attributed the increase in requests
Fuel oil sales as the worst of the winter directly to recent increases in LNG prices.
weather was passing in February dipped over In late October, president of the Petroleum
20% month on month, in line with increased of Japan Tsutomu Sugimori went on record say-
availability and subsequent imports of LNG. ing his member refineries, including ENEOS of
That saw crude imports drop to just under which he is also a serving chairman, were not
113,000 barrels for the month, although in sure whether or not they could meet all requests
the same month fuel oil imports were still they had received.™

Week 46 19•November•2021 www. NEWSBASE .com P11