Three oil refiners and trading firm Sumitomo Corp. plan to merge their liquefied petroleum gas import and wholesale operations in a move that would give them the largest share of Japan's LPG market.
The refiners are Cosmo Oil Co., TonenGeneral Sekiyu K.K. and Showa Shell Sekiyu K.K. They and Sumitomo plan to reach a basic agreement by June and set up a joint venture by next December, they said in a joint statement Tuesday.
LPG importers are under pressure as demand for the fuel weakens because of energy-saving efforts and competition with electricity and city gas.
Demand for the business year ending in March 2015 is expected to fall 0.6 percent to 17.5 million metric tons from a year earlier, an advisory panel to the Ministry of Economy, Trade and Industry said in a June report.
The planned venture will have revenues of about ¥400 billion and domestic LPG sales of about 3.6 million tons per year, they said.
It would control about 26 percent of Japan's LPG wholesale market, the largest share, Koji Moriyama, general manager of Cosmo Oil's corporate planning department, said.