Japan's JXTG eyes reducing Middle East term crude imports in 2020
Japan’s largest refiner JXTG Nippon Oil & Energy is looking to reduce term crude oil imports from the Middle East in 2020 in order to diversify supply sources and adopt a flexible feedstock procurement strategy in preparation for stricter marine fuel sulfur requirements, the president of parent company JXTG Holdings said Friday.
“We are looking to reduce fixed deals as much as possible in order to be able to buy light and heavy grades as needed on a spot basis,” Tsutomu Sugimori said at an earnings press conference in Tokyo.
“This would be most economically rational as well as helping [us] to respond to the IMO [mandate],” Sugimori said, referring to the International Maritime Organization’s sulfur limit mandate for marine fuels from next year.
The possible move by JXTG, which has an installed refining capacity of 1.93 million b/d, to reduce its Middle East term crude supply is significant because the supply from the region accounted for 88% of Japan’s total crude imports in 2018.TERM DEPENDENCE
Japan’s term crude imports also accounted for 69% of the 3.06 million b/d imported in 2018, with spot supplies making up the balance, according to the Ministry of Economy, Trade and Industry data.
Asked whether JXTG is looking to cut term crude procurements from the Middle East, Sugimori told reporters: “After all the Middle East accounts for the largest amount of our term [supply].” “If we are reducing them [term procurements], that’s only the region,” he added.
Sugimori’s remarks came....