Japan’s Idemitsu Kosan Co. is reducing the capacity of the crude distillation unit (CDU) at its Chiba refinery by 9% as the government pushes for greater efficiency in the downstream oil sector.
Idemitsu said it will reduce capacity at the refinery by 20,000 barrels per day (bpd) to 200,000 bpd from 1 April.
Japan’s Ministry of Economy, Trade and Industry (METI) has called for oil refiners to reduce the country’s total crude oil refining capacity by as much as 10% or 400,000 bpd by the end of Fiscal Year 2017, due to declining oil product demand amid an ageing population and more fuel-efficient vehicles.
The move at Chiba will reduce Idemitsu’s total CDU capacity to 535,000 bpd. It has two other refineries in Aichi and Hokkaido. It still needs to make further cuts of as much as 35,000 bpd over the next two years to meet the government’s target, which it said it will do in stages.