JAPAN CRISIS: Refiners seek oil product imports, but volumes not firm

Singapore (Platts)--14Mar2011/621 am EDT/1021 GMT

Japanese refiners are tentatively seeking imports of gasoline, kerosene, diesel and fuel oil, in the wake of the devastating earthquake last Friday, industry sources said Monday.

The volumes sought after, however, were not fully finalized as of now, as refiners are still in the process of assessing their shortfalls, Tokyo-based sources said.

Refiners such as Cosmo Oil and JX Nippon Oil and Energy -- which have refinery outages due to the earthquake -- were heard inquiring for imports of finished-grade oil products for prompt March and April delivery.

But both have yet to make any purchases, given that they are still in the process of evaluating the extent of the shortfall of their supply to the domestic market.

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Cosmo for one, is understood to be still in talks with its domestic customers, while JX is re-planning its refinery operations.

Cosmo's 220,000 b/d Chiba refinery and JX's 145,000 b/d Sendai, 270,000 b/d Negishi and 252,500 b/d Kashima plants are all shut due to the earthquake.

TonenGeneral -- under US oil major ExxonMobil -- however, is understood to be covering its import needs from ExxonMobil's system, after shutting its 335,000 b/d Kawasaki refinery.

Apart from refiners that were directly hit by the earthquake, some other Japanese refiners were also heard making import inquiries for transport fuels and fuel oil for power generation, given that 27% of the country's total refining capacity of 4.52 million b/d is now shut.

Meanwhile, JX continued its force majeure on waterborne and truck shipments of gasoline and middle distillates Monday from most parts in eastern Japan to the north, marking it the third day of the force majeure in the wake of the massive earthquake, Platts reported earlier.

Prompt supply of finished grade gasoline and gasoil, meeting Japan's stringent specifications can only come from South Korean refiners and blending tanks in Singapore.

At least one South Korean refiner is understood to be looking at increasing its oil product exports to Japan, possibly through "re-arranging" some of its export cargoes, given that the majority of its barrels for April have already been committed through term and spot contracts.

Another problem potential Japanese importers face, is berthing and discharge of oil products at the ports, and availability of short-range vessels in the Northeast Asian region.

In January, Japan produced 4,901,525 kl of gasoline, or 24.9% of the product yield, recent data from government agency METI showed.

Kerosene output in January was at 2,807,951 kl, or 14.3% of products yield, while gasoil production, at 3,656,856 kl, was 18.6% of the yield.

Total fuel oil output, at 3,765,603 kl, accounted for 18.1% of the yield and jet fuel, at 980,445 kl, was nearly 5%.

--Irene Tang, irene_tang@platts.com