London (Platts)--14Mar2011/1052 am EDT/1452 GMT
More refined products are likely to be dispatched to Japan from other countries after the suspension of production at a minimum five refineries due to damage caused by a massive earthquake and tsunami Friday, according to shipping sources Monday. The suspension of three refineries owned by JX Nippon Oil & Energy's in Sendai, Kashima and Negishi as well as two in Chiba owned by Cosmo Oil and Kyokuto Petroleum Industry will amount to 1.06 million b/d in lost capacity. TonenGeneral Sekiyu, meanwhile, did not confirm its crude distillation units at Kawasaki refinery were shut due to the earthquake, only saying operation of major units has been suspended. The refinery has a capacity of 335,000 b/d. Request a free trial of: Oilgram NewsOilgram News brings fast-breaking global petroleum and gas news to your desktop every day. Our extensive global network of correspondents report on supply and demand trends, corporate news, government actions, exploration, technology, and much more. "Since so many refineries are down, Japan will have to import more clean products than crude," a shipowner source said. "They can't refine, but they can import and it will be interesting to see where it comes from." The confirmed refinery shutdowns make up 1.06 million b/d of lost capacity out of Japan's total of 4.52 million b/d. Kawasaki would take that total to around 1.4 million b/d. Another source agreed that shipowners would be eyeing a potential increase in refined oil shipments into Japan, possibly from nearby refineries. "As refineries have been shut after the earthquake, they will need more product -- perhaps refined in the region, [perhaps elsewhere], but it's too early to say as yet," said the source with a shipowner. "But there are lots of people assessing the other ports elsewhere in the country...they need to check pipelines [and infrastructure] before they start," he added. In an e-mailed statement Monday, the Gulf Agency Company said there was currently no official announcement on the status of ports in the region, adding production was halted at refineries and chemical plants after the 9.0 magnitude earthquake struck Friday. Clean freight rates heading far east are expected to rise, although no new fixtures to Japan have been reported on the day. "We expect rates will become higher overall," a broker said. "Owners will take advantage [of the situation in Japan]. Currently the lump sum rate from the Mediterranean to Japan stands at $1.9 million and from the Caribbean to Japan the rate is $1.7 million, according to Platts data. --Stefan Naidu, stefan_naidu@platts.com--Rob Sheridan, robert_sheridan@platts.com
More refined products are likely to be dispatched to Japan from other countries after the suspension of production at a minimum five refineries due to damage caused by a massive earthquake and tsunami Friday, according to shipping sources Monday. The suspension of three refineries owned by JX Nippon Oil & Energy's in Sendai, Kashima and Negishi as well as two in Chiba owned by Cosmo Oil and Kyokuto Petroleum Industry will amount to 1.06 million b/d in lost capacity. TonenGeneral Sekiyu, meanwhile, did not confirm its crude distillation units at Kawasaki refinery were shut due to the earthquake, only saying operation of major units has been suspended. The refinery has a capacity of 335,000 b/d.
Oilgram News brings fast-breaking global petroleum and gas news to your desktop every day. Our extensive global network of correspondents report on supply and demand trends, corporate news, government actions, exploration, technology, and much more.