The new president of Japan’s biggest oil refiner Eneos Holdings Inc., Katsuyuki Ota, said that the company would speed up its transformation to be a supplier of low-carbon energy and materials, citing the crush in domestic demand due to the coronavirus pandemic as the main factor.
Previously in 2019, Eneos, formerly JXTG, stated its long-term plan to transform with an assumption that Japan’s oil demand would fall by 2% per year and halved by 2040. Later on, in May 2020, the company disclosed its JPY1.5 trillion (USD14 billion) to March 2023 to commence with the change.
Ota, however, saw that the country’s oil demand is less likely to go back to the pre-pandemic levels and the company has to proceed with several reforms quicker to advance growth businesses such as renewable energy and streamline the refinery structure.
He elaborated that the transformations do not necessarily mean only closing refineries, but also turning them into chemical refineries or energy platforms for electric power, hydrogen and others. He added that Eneos’ refineries in a petrochemical complex in Kashima, east of Tokyo, and Mizushima, western Japan, have potential, among others.
At the moment, Eneos operates 11 refineries and the total capacity is 1.93 million bpd. Due to the pandemic, the run rate plunged to 68% in April, the lowest since 2010. The company has decided to stop refining at its 115,000 bpd Osaka refinery which would cut Japan’s overall capacity to 3.4 million bpd, compared to 1980’s 5.94 million bpd.
Eneos will also cooperate with Mitsubishi Chemical to enhance petrochemical refining at their Kashima plants.
