Japan's domestic oil demand is on a steady decline, leading Japanese majors to explore pportunities overseas. In a first of its kind move, a Japanese refiner will build a plant in Asia outside Japan. Idemitsu Kosan Co. and Mitsui Chemicals Inc. have 39.8% acquired stake in a US$5.8 bln JV refinery project in Vietnam. With a 200,000 bpd crude distillation unit, the The Nghi Son refining and petrochemical complex will be fed by Kuwaiti crude. The complex will be the second refinery in Vietnam and will start operating in mid-2013.
Idemitsu and Kuwait Petroleum International will hold 35.1% stake in the JV, Vietnam's state oil firm Petrovietnam will hold 25.1%, Mitsui Chemicals will acquire the balance 4.7% in the venture with capitalisation of US$200 mln. The venture will aim to procure 70% of its funds via project financing, from the Japan Bank for International Cooperation and commercial banks.