Idemitsu Kosan and Showa Shell form VLCC alliance

Idemitsu Kosan and Showa Shell form VLCC alliance

Two Japanese oil companies Idemitsu Kosan and Showa Shell have formed an alliance yesterday to cooperate on a series of operations in oil refining and logistics.

The set up of the new alliance, which is called Brighter Energy Alliance, is a move to prepare for a merger planned by the two companies.

Under the alliance, the companies will aim to optimise their crude oil purchases and facilitate the interchange of finished products. In addition, they would also work together to reduce refining costs.

In the meantime, the alliance will consolidate the companies’ crude tanker shipping operations and jointly manage their fleet of about 20 VLCCs for loadings from May, the latest in a series of VLCC consolidations seen across the supertanker sector in recent months.

The two companies said in a press conference that they will not be able to consolidate their production planning in the currently fiscal year as each company has individual contractual commitments.

Idemitsu Kosan and Showa Shell signed a memorandum of understanding in November 2015, under which they had planned to form a combined entity, however the deal was delayed last year due to opposition from Idemitsu’s founding family.

Jason Jiang

Jason worked for a number of logistics firms following his English degree, then switched this hands-on experience to writing and has since become one the most prolific writers on the diverse China logistics industry writing for a host of titles including Supply Chain Asia, Cargo Facts and Air Cargo Week. Jason’s access to the biggest shippers with business in China has proved an invaluable source of exclusives.

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