JX Nikko signs MoU with PetroChina

JX Nikko Nisseki Energy Group, the oil refining unit of Japanese energy company JX Holdings Inc., said it has signed a memorandum of understanding with PetroChina Co. Ltd. to set up a joint venture to run JX Energy’s 115,000 barrel a day Osaka refinery as a plant dedicated to exports. Starting from October 1, PetroChina will be responsible for marketing all refined products from the Osaka refinery and will decide on products, volumes and export destination countries. PetroChina is likely to swap the plant’s gasoline, which is difficult to sell in overseas markets other than South Korea due to specification differences, for JX’s other more marketable oil products. The news is important for JX Energy as it has been struggling to adapt to falling domestic oil demand by either reducing its oil refining capacity or boosting exports. The joint venture will export most of its refined products to China and other Asian countries where local demand is strong. (August 31, 2010)