Cosmo Oil Co., Ltd. and TonenGeneral Sekiyu K.K. said that completion of the pipeline connecting their respective refineries in Chiba would be delayed until mid-2018. The original schedule was set for March 2017.

Cosmo Oil established the Keiyo Seisei joint-venture company with TonenGeneral Sekiyu in January 2015 to generate more than JPY 10 billion (USD 83 million) of synergy from combining their operations.

The JPY 3 billion (USD 25 million) cost of building the pipeline will be shared by Cosmo Oil and TonenGeneral.

Cosmo Oil plans to close its 100,000 barrel-per-day No. 1 crude distillation unit in Chiba as soon as the nine seabed pipelines are completed, which will mutually supply semi-finished products to the Cosmo Oil and TonenGeneral Sekiyu refineries.

The move would allow Cosmo Oil to comply with the Japanese government’s requirements under the First Notification on Sophisticated Methods of Energy Supply Structures.

They cited manpower shortage due to construction work related to the 2020 Tokyo Olympics as the reason for the delay in the original schedule.