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Asia: Japan shuts 32% of refining capacity on quake; may not import large quantities of oil products

https://www.chemnet.com   Mar 15,2011
Quake-stricken Japan has shut a combined 1.45-mil bbl of refining capacity so far, accounting for about 32% of the total, according to some seniors with Japanese oil companies.

Although oil product supplies became tight in some areas of Japan, the country will not likely import a large amount of gasoline, gasoil and fuel oil, the sources believed. The tightness would be eased in a short term, as most refineries shut down were actually not damaged, the sources said. However, Japan may reduce exports to grantee the supplies to the domestic market.

"Shutdown of some refineries would not lead to obvious supply shortage in the whole nation, because Japan has excessive refining capacity and demand from quake-hit areas declined," said one of the sources. In addition, "import might not be the best option, with ports closed," added the source.

Japanese power companies may be reluctant to import fuel oil to as alternative fuel, given lofty import costs, another source denoted. Instead, they may be inclined to import more natural gas to generate power for peak-shaving purpose, the source expected.

Jet supply to Narita Airport was not affected as refineries in Chiba all delivery jet to via Fuji Oil's pipeline, which was now in normal operation.
It is unknown when the refineries would be restarted due to unpredictable duration of quake impacts, according to sources with JX Oil and Idemitsu.
A magnitude 9.0 earthquake struck off the northeast coast of Japan in the afternoon of Mar 11, triggering tsunami. Some refineries located in northeast coasts were shut down for safety concerns.
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