Idemitsu sees no immediate impact on stable oil supply
Japan extends ban for foreign nationals’ entry
Some ships reluctant to call at Chinese ports
Japan’s Idemitsu Kosan and JXTG Nippon Oil & Energy have tightened control of accepting oil tankers in the wake of the outbreak of the coronavirus, or COVID-19, the country’s two largest refiners said Friday, amid some concerns over the potential impact on the inflow of crude and light distillate products into the country.
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“We have tightened our control over accepting crude oil and products tankers in the wake of the coronavirus outbreak,” a spokesman for Japan’s second largest refiner Idemitsu Kosan told S&P Global Platts Friday. The company’s tightened scrutiny also applies to crews on board the tankers, the spokesman said.
Idemitsu, however, does not see any immediate impact on its stable oil supplies, he added.
In a similar move, Japan’s largest refiner JXTG Nippon Oil & Energy has also started checking records of all ocean liners, including crude, oil product and petrochemical tankers, it accepts upon entry into Japan to determine whether these ships have called at any Chinese ports in the last two weeks, a company spokesman said Friday.
JXTG is also making checks on the physical well-being of the crew on board the ocean liners from China, and in the event it finds the crew in poor health, the company will inform Japan’s quarantine stations as to whether to accept the ships at Japan’s ports, the spokesman added.
Idemitsu, as a group, has 1.09 million b/d of refining capacity over seven refineries in Japan. Its shipping unit, Idemitsu Tanker, has a fleet of eight management ships, which includes two VLGCs, or very large gas carriers, as well as 15 VLCCs and four VLGCs on time charter.
JXTG has a combined 1.93 million b/d of refining capacity across Japan. JX Ocean, its shipping unit, has a fleet of 13 crude oil tankers, 10 LPG carriers, 18 chemical tankers, three product tankers, one asphalt tanker and nine bulk carriers.
Idemitsu and JXTG’s move came to light as the Japanese government is increasingly tightening its control over entry of foreign nationals, who had visited certain parts of China in the last two weeks.
ZHOUSHAN A KEY OIL PORT
Japan on Thursday banned the entry of non-Japanese passport holders, who had visited Zhejiang Province in eastern China in the past 14 days upon arrival in Japan or holders of passports issued by the province. This followed a February 1 ban on foreign nationals, who had visited the Hubei Province in the last two weeks or passport holders issued by the province in central China.
Zhoushan is a major port in the Zhejiang Province, where Sinopec and Zhejiang Petroleum and Chemical, with a phase one operating capacity of 20 million mt/year, receive their crude imports, and load their product outflows.
Zhoushan also receives imports for major refineries like Sinopec’s refining giants, the 23 million mt/year Zhenhai Petrochemical, the 21 million mt/year Jinling Petrochemical, the 16 million mt/year Shanghai Petrochemical and the 14 million mt/year Yangzi Petrochemical.
As of Thursday night, there were 51,986 confirmed cases in Hubei, and 10 confirmed cases in Zhoushan, according to the latest update from China’s National Health Commission.
SHIPS RELUCTANT TO CALL AT CHINA
Even as some ships were reportedly reluctant to call at Chinese ports due to the coronavirus outbreak, processes to enable seaborne logistics to proceed were expected, market sources said.
Shipping sources said vessels would need to be covered with a pandemic related clause, and likened the situation to when ships called at African ports during Ebola outbreaks.
“Generally if a vessel called on China, we need a clause to cover us as the next port may not allow the vessel in for 14-28 days,” a tanker shipowner said.
While a 14-day quarantine could be covered in long-haul voyages, a tanker’s voyage from China to Singapore takes around half of that.
“You can get ships to call at China, but there are clauses that owners are requesting to cover for quarantine and so on … like when there was Ebola outbreak in Africa last time,” a tanker broker said.
(Updates with JXTG’s comments)