CANBERRA: The Singapore-based international trading arm of Japanese refiner Cosmo Oil is looking at supplying refined oil products to Australia as well as studying opportunities in East Africa, a company official said Thursday.
Japanese refiners and traders are increasingly eyeing a larger share of the market in Australia, which is witnessing a series of refinery closures.
“We are looking for opportunities in Australia to supply products and studying the potential to supply products from third parties to East African markets,” Kiyotaka Mannami, managing director of Cosmo Oil International Pte Ltd, told Platts.
Australia has four refineries after the closure of BP’s 102,000 b/d Bulwer Island refinery in the east coast city of Brisbane.
The shuttering of the 50-year-old refinery, which was first flagged in April 2014, brought to four the number of facilities that have closed around the country since 2003, when ExxonMobil mothballed its 78,000 b/d plant at Port Stanvac in South Australia.
In 2012, Shell converted its 79,000 b/refinery at Clyde in Sydney into an import terminal, and Caltex did the same with its 135,000 b/d Sydney facility at Kurnell in late 2014. BP still operates the 146,000 b/d Kwinana oil refinery in Western Australia.
Australia’s other three refineries are Viva Energy’s 120,000 b/d Geelong facility in Victoria, ExxonMobil’s 85,000 b/d Altona plant in Victoria, and Caltex’s 109,000 b/d facility at Lytton in Brisbane.
Australian production of refined products was expected to have fallen 13% to 515,000 b/d in the 12 months to June — the country’s 2014-15 financial year — mainly due to the closures at Kurnell and Bulwer Island, according to Department of Industry and Science data. As a result, imports of crude oil and condensate were also forecast to decline, by 20% to 336,000 b/d in the period.
Imports of refined products will increase to 667,000 b/d, in line with continued growth in domestic consumption.
Australian petroleum products imports from Japan jumped to an average 69,491 b/d in the 2013-14 financial year, up 47% year on year, according to Australian Petroleum Statistics data.
Until recent years, Cosmo Oil was an active middle distillates exporter, but its exports dropped in the wake of the 2011 earthquake and subsequent outage of its largest Chiba refinery in Tokyo Bay, coupled with its suspension of refining operations at the 140,000 b/d Sakaide refinery in July 2013. Cosmo Oil now has a refining capacity of 220,000 b/d in Chiba and its Sakaide facility is an oil terminal.
It currently has a combined 452,000 b/d capacity across three refineries in Japan. Mannami said the company was also keen to explore options to trade in third-party supplies.
“We are keen to do more trading in products from other sources, not only from our own refineries, but also from third-party sources,” Mannami said on the sidelines of the Platts Asian Bulk Liquid Storage conference in Singapore.
“For third-party product trading, diesel is the main focus now. We are keen to bring in products from the Middle East,” he said, adding Cosmo Oil was also eyeing Southeast Asian markets.
Cosmo Oil said earlier this year it was looking to step up its purchases of Mexican Isthmus crude since the grade has become competitive against Middle East medium-sour grades such as Saudi Arabia’s Arab Light. Mannami said Cosmo Oil was also looking at opportunities to diversify its crude buying.
“We bought Mexican crude this year. We are also looking for spot arbitrage opportunities so that we can bring in crude from various sources for our parent company,” he said. Last year, Cosmo Oil became the first Japanese company to take Isthmus crude in a decade when it imported 2 million barrels over March-May.
