Japan’s Idemitsu Kosan Co is to shut an oil refinery that has been running for 53 years in the country’s west, as domestic demand for fuel continues to decline and a global push to decarbonize intensifies.
The company is to halt processing at its Yamaguchi plant by the end of March 2024, it said in a statement on Tuesday.
Idemitsu would consider new uses for the site, while continuing to store oil and generate solar power there.
“There will be surplus refining capacity by 2030 that can be cut down,” Idemitsu executive vice president Susumu Nibuya told a news conference on Tuesday. “We plan to consolidate our capacity beyond 2030, as demand for oil products continues to decline.”
The refinery, first opened in 1969, has the capacity to process 120,000 barrels of crude per day.
The Nihon Keizai Shimbun earlier reported the announcement.
Idemitsu is to make Seibu Oil Co — which operates the Yamaguchi refinery — a wholly owned subsidiary by acquiring stakes held by shareholders UBE Corp, Chugoku Electric Power Co and others.
The refiner plans to increase its stake in Seibu Oil to 66.9 percent from 38 percent. The firm plans to keep the 435 jobs at the site.
Japanese oil refiners are consolidating their operations due to falling domestic demand, rising international competition and a shift away from fossil fuels.
Eneos Holdings Inc in January announced that it would next year close one of its oil refineries in Wakayama Prefecture, near Osaka.
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