Japanese firms to finalise LPG merger

: LPG
14/08/05

Tokyo, 5 August (Argus) — Japanese refiners Cosmo Oil, Showa Shell and TonenGeneral and trading house Sumitomo have agreed to consolidate their LPG business operations in April next year after nearly eight months of discussions.

The companies will create a new joint-venture LPG firm focusing on trading, imports and wholesale operations on 1 April next year, with each having a 25pc share. The new firm will trade around 1mn t/yr of LPG in the international market, import around 3mn t/yr and sell 3.6mn t/yr in the domestic market. The merger is still dependent on approval from the relevant authorities.

The companies, excluding TonenGeneral, has separately agreed to establish a joint-venture firm dedicated to LPG retail by the same deadline, which is also subject to government approval. The retail company's ownership share will be Showa Shell 47.7pc, Sumitomo 45.9pc and Cosmo Oil 6.4pc.

The consolidation aims to cut costs, diversify supply sources and purchasing methods, enhance distribution efficiency and expand supply chains, the companies said. Stagnant growth in Japan's LPG demand and a need to rationalise domestic distribution is behind the merger.

The Japanese LPG sector has been through considerable consolidation in the past decade in response to shrinking demand amid rising competition with rival town gas suppliers. The number of LPG importers have more than halved from more than 20 to eight during the period. Showa Shell and Sumitomo have been already LPG partners since 2008. The further tie-up will cut the number of Japanese LPG importers to six.

Japan's LPG sales in the 2013-14 fiscal year ending 31 March totalled 15.5mn t, down by 6.4pc from 16.6mn t in 2012-13, according to the Japan LP gas association.

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EU to dilute Ice vehicle phase out: German lawmaker

25/12/15

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Aramco Jafurah project still in commissioning: Resend

25/12/15

Aramco Jafurah project still in commissioning: Resend

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Supply surplus masks regional market tightness: IEA

25/12/11

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Saudi Arabia brings giant Jafurah gas project onstream

25/12/03

Saudi Arabia brings giant Jafurah gas project onstream

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