Cosmo Oil has unveiled plans to shut down its refinery in Sakaide, Kagawa Prefecture in Japan in July 2013.
Shrinking oil demand in the country has been cited as the reason by the company for the closure of the refinery, currently capable of handling 140,000 barrels of crude oil a day.
Closure is expected to reduce the company’s total refining capacity by about 20% to 500,000 barrels and is estimated to cut costs by about JPY10bn ($127.4m) annually.
Post shutdown, the refinery will be used as a logistics base and may also be used for solar power generation.
Cosmo Oil president Keizo Morikawa said the changing business environment made it unavoidable to shut down the refinery in Sakaide.
The refinery site may be utilised to expand its liquefied natural gas base, which had been set up by the company in partnership with Shikoku Electric Power.
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By GlobalDataCosmo Oil will now focus its operations in three domestic refinery operations located in Ichihara, Chiba Prefecture; Yokkaichi, Mie Prefecture; and Sakai, Osaka Prefecture. It intends to boost operational efficiency by raising capacity utilisation rates.
The company will transfer 400 workers from the Sakaide refinery to other bases.
