Japan’s JX South Korea’s SK eye petchem JV – Nikkei reported

Japan’s JX and South Korea’s SK eye petchem JV – Nikkei reported

3:58 PM, 5th August 2011
Japan’s JX and South Korea’s SK eye petchem JV – Nikkei reported

· To invest $1.5 billion in South Korea petchem, lubricant plant - Nikkei.

· Expected to reach agreement on Friday – Nikkei.

· JX said considering JV but nothing decided yet.

TOKYO, JAPAN: Japan’s JX Nippon Oil Energy Corp will join forces in petrochemicals and lubricating oils with SK Innovation Co of South Korea, investing around 120 billion yen ($1.52 billion) in new production ventures in South Korea, the Nikkei business daily reported.

The two companies are faced with flagging demand for gasoline and other petroleum products in their respective home markets, the paper said.

A formal agreement on the business partnership is expected as early as Friday, the report said. The new petrochemicals and lubricants factories will be built on the grounds of the South Korean group’s refinery complex in the Southeastern city of

Ulsan. JX Energy will invest more than 50 billion yen in the two ventures, the Nikkei said.

JX Holdings said it was considering joint ventures based on its strategic tie-up with SK Group but no details had been set.

In petrochemicals, the JX Holdings Inc unit will form a 50-50 venture with SK Global Chemical Co, a unit of SK Innovation. Production of paraxylene, an oil-based raw material for synthetic fibres and plastics, is expected to begin around 2014, the business daily said.

At an investment of some 90 billion yen, the new facility will have an annual output capacity of about 1 million tonne, making it one of the biggest in the world, the daily reported.

This will bring JX Energy’s total paraxylene capacity, now at 2.62 million tonne a year, to about 3.1 million tonne and raise its share of the Asian market to around 15 per cent, cementing its position as the top producer in the region, the paper reported.

The Japanese market for petroleum products has been in decline since fiscal 2003. It sank to 196 million kilo litre in fiscal 2010, returning to fiscal 1987 levels. Among other Japanese refiners, Cosmo Oil Co and Idemitsu Kosan Co are also branching out further into petrochemicals through foreign ventures, the Nikkei said.

(C) Reuters

 

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