ENEOS to shutter Wakayama refinery in October 2023

ENEOS Corporation, formerly JXTG Nippon Oil & Energy Corporation, will  terminate refinery operations, including logistics, at its Wakayama refinery located in Arida City, Wakayama Prefecture, Japan, effective October 2023. 

The Wakayama refinery, which started operations in 1941, has 447 employees. Its crude processing capacity is 127,500 barrels per day (bpd).

ENEOS said the rapid reduction in demand due to the Covid-19 pandemic, in addition to structural domestic demand decline for petroleum products, and severe international  competition in Asia were factors behind the decision.

“As a result, it was determined that  there was a pressing need to optimize the manufacturing of refineries and plants as well as the  supply network for petroleum products. ENEOS therefore decided to terminate all functions of the  Wakayama refinery,” the company said in a statement.

Pre-pandemic, domestic demand for petroleum products had been declining by 2% per year, due to the country’s aging population. It was expected that domestic demand would be halved by 2040, from 2018 levels.

The Wakayama refinery is one of eight refineries owned by ENEOS, and one of the smallest, after the company shut down operations at its 115,000 bpd Osaka refinery. Its largest refinery is Mizushima, with a crude distillation capacity of 350,200 bpd.

According to the latest statistics from the Petroleum Association of Japan (PAJ), the country has 21 refineries with a total crude distillation capacity of 3.4 million bpd.

As one of the envisioned goals in the ENEOS Group Long-Term Vision to 2040, ENEOS aims to  “become one of the most prominent and internationally competitive energy and materials company  groups in Asia,” the company said in a statement. 

“To achieve this goal, ENEOS is striving to strengthen the competitiveness of its  entire supply chain in petroleum refining and marketing as one of its base businesses, with safe  operations and a stable supply of energy at its major premises.” 

Until the termination of all functions of Wakayama Refinery in October 2023, the refinery will  continue to contribute to a stable supply of energy, putting a high priority on safe operations.