MOSCOW (MRC) -- Japan's Idemitsu Kosan said on Tuesday its JV with Mitsui Chemicals would conduct work to expand the processing of propane at Idemitsu's naphtha cracker to take advantage of cheap liquefied petroleum gas (LPG) prices, said Reuters.
The work will be carried out next autumn and last about a month, during which time the cracker will be shut, a company spokeswoman said.
The upgrade will boost the cracker's capacity to process propane as feedstock by three or four times, said Hideki Gotoh, deputy general manager of Idemitsu's petrochemical business. He declined to give the current capacity.
He added that Idemitsu would pay the costs for the upgrade, without giving a figure. The benefit from boosting propane and cutting naphtha as feedstock is set to lead to cost cuts of around USD8.90 million a year, the company spokeswoman said.
The cracker will take advantage of its location next to the LPG import facility in Idemitsu's Chiba refinery. It will mainly rely on LPG imports for feedstock rather than a small quantity of LPG produced at the plant, officials said.
The cracker is separately scheduled to undergo planned maintenance next spring, company sources said. Idemitsu and Mitsui Chemicals set up the 50:50 venture in 2010 to jointly operate their naphtha crackers in Chiba, east of Tokyo, to save on costs.
Idemitsu has a naphtha cracker adjacent to its Chiba refinery with capacity to produce 414,000 tpy of ethylene, while Mitsui has one with a capacity of 612,000 tpy.
As MRC informed earlier, Idemitsu Kosan Co. and smaller rival Showa Shell Sekiyu will merge on April 1 next year. Japan's No.2 and No.5 refiners by revenue agreed last November in a deal worth approximately USD4 B to create the nation's second-biggest refiner sometime between October 2016 and April 2017.
Idemitsu Kosan is a Japanese petroleum company. It owns and operates oil platforms, refineries and produces and sells petroleum, oils and petrochemical products. The company runs two petrochemical plants in Chiba and Tokuyama. The two naphtha crackers can produce up to 997,000 tonnes of ethylene per year.
MRC