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S Korea LG Caltex Asks Japan Oil Cos For Gasoline Supply

The Wall Street Journal: S Korea LG Caltex Asks Japan Oil Cos For Gasoline Supply

“Showa Shell Sekiyu spokesman attributed the tight gasoline supply in part to Japan’s strong demand this summer”

DOW JONES NEWSWIRES
July 21, 2004 12:39 a.m.

TOKYO — South Korea’s LG Caltex Oil Corp. has asked Japanese refiners to urgently export excess gasoline supply to the company as part of its emergency measures to help cover possible near-term supply shortages created by the shutdown of its 650,000-barrel-a-day refinery.

“We’ve contacted them,” an LG Caltex official said Wednesday, when asked whether there were talks underway between LG Caltex and Japanese oil companies for gasoline supply for prompt delivery.

LG Caltex, an unlisted joint venture of LG Group (LGG.YY) and ChevronTexaco Corp. (CVX), shut the nation’s second largest refinery Monday, due to a strike called by workers for higher pay and shorter working hours. A spokesman at LG Caltex said refining operations won’t restart for at least another 20 days.

But many Japanese refiners will unlikely be able to provide LG Caltex with significant volumes of gasoline, said spokesmen for Japan Energy Corp. and Showa Shell Sekiyu K.K. (5002.TO).

“We haven’t received such a request for gasoline supply from LG Caltex, but Japanese refiners, as a whole, appear to be facing a tight supply situation now, following regular inspections and maintenance for refinery units this spring,” said a spokesman for Japan Energy, an oil refining unit of Nippon Mining Holdings Inc. (5016.TO).

The Showa Shell Sekiyu spokesman attributed the tight gasoline supply in part to Japan’s strong demand this summer, in line with the recent recovery in the nation’s economy.

Akihiko Tembo, president of Idemitsu Kosan Co. (IKC.YY), said late Tuesday that “Japan’s gasoline demand this summer is 10% higher than the summer last year.”

According to the Petroleum Association of Japan, the nation’s commercial gasoline stocks as of July 10 totaled 1.88 million kiloliters, a 10-year low, compared with 2.12 million KL as of July 12 last year.

-By Shigeru Sato, Dow Jones Newswires; 813-5255-2944; [email protected]

-Edited by George Bernard

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