Idemitsu, Mitsui Chem form 50:50 JV to operate Chiba naphtha crackers

02-Apr-10

Idemitsu Kosan Co and Mitsui Chemicals have set up a 50:50 joint venture to operate their naphtha crackers in Chiba. The Japanese oil refiner and the Japanese petrochemical maker have been considering such an integration for about a year. The two firms expect an annual joint savings of 3 billion yen (US$32.1 mln) from the naphtha venture within 18 months. In due course, the JV is targeting annual cost savings of 10 bln yen within three to five years. Idemitsu’s naphtha cracker has capacity to produce 374,000 tpa of ethylene and Mitsui’s capacity is 553,000 tpa at the complex. This step coincides with the onslaught of record naphtha cracking capacity this year in Asia and more competitive Middle East petrochemical plants. Most Asian crackers use naphtha as the main feedstock to produce ethylene and propylene. Japan has 15 crackers with a combined ethylene capacity of 7.8 mln tpa, the most cracking units in Northeast Asia outside of China.