* Cosmo wants to boost trade via Singapore
* Also looking for storage opportunities in Asia
* Plans to cut refining capacity to 400,000 bpd by April
* Japan oil companies looking beyond faltering home market
By Florence Tan
SINGAPORE, Sept 5 - Japan's Cosmo Oil expects to triple the
volume of oil products it trades out of Singapore in 2016 from a
year ago, pushing to expand its business beyond its tepid
Japanese refiners have increasingly been turning abroad as
local appetite for oil products falters on an upsurge in
fuel-efficient vehicles and as the country's population rapidly
Rising Japanese exports come as neighbouring China ships
record volumes of oil products, feeding a glut in Asia and
intensifying competition for market share among refiners.
"Product trading is expected to triple against the result of
2015," Cosmo Oil President Hisashi Kobayashi told Reuters,
although he declined to give the volume for last year.
The company's refining operations are based in Japan, while
trading is conducted through its Singapore hub.
Other Cosmo Oil executives said the firm currently exports
and trades a total of about 40,000 barrels per day of fuel,
mainly diesel to Australia. They did not break down that figure.
The glut in supply of oil products in Asia helped drive
regional refining margins to five-year lows earlier this year in
a blow to refiners.
But Kobayashi said that cheaper prices for products churned
out in Asia has stoked interest from buyers elsewhere, opening
up so-called "arbitrage routes" to the Americas.
"We are a refiner and a trader of products. We see arbitrage
not as a threat but an opportunity," Kobayashi said in an
interview ahead of an energy conference in Singapore.
"We've already contacted some of the teapots in China to
see if we can trade their products," he said, although he added
that logistics bottlenecks may cap fuel exports from such
The unit of Cosmo Energy Holdings is looking for
storage opportunities in Asia to blend fuel and could branch out
in its trading to gasoline and fuel oil in the future,
The company is also considering monetizing its knowledge of
refining by providing technical services to refiners
internationally, they added.
Cosmo Oil operates refineries with a total crude processing
capacity of 452,000 barrels per day in Japan, but that will fall
to 400,000 bpd by the end of March 2017, Kobayashi said,
following a government mandate to reduce excess capacity.
Cosmo's No.1 crude distillation unit at its Chiba refinery
will be shut in fiscal year 2018 once a pipeline to link the
facility to a plant operated by TonenGeneral is
complete, he said.
The company expects to decide soon which of the two CDUs at
its Yokkaichi plant will be shut.
Cosmo officials said the firm had no plans to merge with
another refining entity, even as four of the largest Japanese
refiners plan to consolidate into two major companies.
(Reporting by Florence Tan in Singapore; Additional reporting
by Osamu Tsukimori in Tokyo; Editing by Joseph Radford)