Eneos Closes Group I Plant


Eneos Closes Group I Plant
Eneos closed the API Group I base oil plant at its Negishi refinery near Tokyo this month, part of a decision to permanently close most of the refining complex. © Karolis Kavolelis / Shutterstock.com

Eneos Corp. closed the API Group I base oil plant at its Negishi refinery near Tokyo this month, part of a decision to permanently close most of the refining complex, a company spokesperson told Lube Report.

Although the exact date of closure was not disclosed, the base oil plant was operating as late as Oct. 7. The spokesperson informing Lube Report of the base oil plant’s closing also noted that some operations at the site will continue.

“The lubricant blending unit and shipping remain operational,” said the spokesperson.

Eneos, which is Japan’s largest energy company, announced last year that it would close the Negishi refinery in October of this year as part of a broad plan to reduce its refining capacity in line with Japan’s steadily falling demand for automotive fuels.

Capacity of the Negishi base oil plant was 229,000 metric tons per year, according to Lubes’n’Greases’ Base Stock Plant Data. Eneos also plans to shutter its refinery in Arida city, Wakayama prefecture – including its 336,000 t/y Group I base oil plant – by October of next year.

Together those closings will halve Eneos’ base oil supply base, making it the nation’s second-largest base oil producer behind Idemitsu Kosan.

The plan to close all of the Negishi refinery was apparently modified as one of the site’s crude distillation units remains in operation, at least for the medium term.

“The No. 3 CDU at Negishi Refinery will continue to operate,” the spokesperson said.

Japan’s demand for finished lubricants is also decreasing, but Eneos plans to increase sales of those products in foreign countries. The company aims to increase overseas lube sales by 13% to 680,000 kiloliters (612,000 metric tons) for the 2022 fiscal year ending March 31, 2023, according to its latest quarterly financial report.

The closure is part of the company’s medium-term plan to optimize its oil refinery and related production facilities in Chiba, Negishi and Wakayama and enhance its service station networks. The company aims to implement organizational structural reforms to develop and strengthen its petroleum products core business and develop next-generation energy and sustainability business. It also plans to “acquire next-generation demand arising from lubricants used for [electric vehicles] and other applications underpinned by economic growth in emerging countries,” according to its Long-Term Vision and Medium-Term Management Plan document.

After its refinery in Arida closes, Eneos will have three base oil plants: two in Mizushima with a total capacity of 411,000 t/y; and one base oil plant owned by Wakayama Petroleum Refining Co. Ltd., a subsidiary of Eneos, in Kainan, with a capacity of 177,000 t/y.