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Japanese JXTG and Mitsubishi Chemical to form JV in Kashima to optimize operations

November 08/2019

MOSCOW (MRC) -- Japan's JXTG Nippon Oil & Energy and Mitsubishi Chemical have decided to form a joint venture in the Kashima complex in the east coast to consider ways to optimize operations of refining and petrochemical production, reported S&P Global with reference to the companies' statements Thursday.

Under the 50:50 joint venture, which will be established in mid-November, JXTG and Mitsubishi Chemical will look at how the companies can boost competitiveness further by effectively using feedstocks for gasoline and petrochemical production in the Kashima complex, the companies said.

The move by JXTG and Mitsubishi Chemical followed a policy report issued by the Ministry of Economy, Trade and Industry in July 2018, calling for closer cooperation between refineries and petrochemical plants to boost international competitiveness.

Japan's petrochemical companies have been accelerating cooperation - such as joint purchase of feedstocks - in a bid to reduce production cost of petrochemical products amid intensifying competition.

Mitsubishi Chemical has a steam cracker in Kashima with an ethylene production capacity of 564,000 mt/year. It shut one steam cracker there in 2014 - which has an ethylene production capacity of 375,000 mt/year -- following a sluggish petrochemical demand in the country.

JXTG currently supplies naphtha via pipeline from the 197,100 b/d Kashima refinery to Mitsubishi Chemical's steam cracker in the Kashima complex. JXTG's Kashima refinery also has a 35,100 b/d condensate splitter.

As MRC informed before, Mitsubishi Chemical shut at its naphtha cracker in Japan for a scheduled maintenance turnaround in early-May, 2018. The cracker was expected to remain under maintenance for a period of around two months. Located at Kashima in Japan, the cracker has an ethylene production capacity of 540,000 mt/year and a propylene capacity of 260,000 mt/year.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,589,580 tonnes in the first nine months of 2019, up by 7% year on year.  Shipments of all PE grades increased. The estimated PP consumption in the Russian market was 976,790 tonnes in January-September 2019, up by 4% year on year. Shipments of PP block copolymer and homopolymer PP increased.

Mitsubishi Chemical with headquarters in Tokyo, Japan, is a diversified chemical company involved in petrochemicals, polymers, agrochemicals, speciality chemicals and pharmaceuticals. The company's main focus is on three business pillars: petrochemicals, performance and functional products, and health care.
Author:Margaret Volkova
Tags:PP, PE, crude and gaz condensate, PP block copolymer, homopolymer PP, propylene, ethylene, petrochemistry, Mitsubishi Chemical, Nippon, Russia, Japan.
Category:General News
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