Nippon Oil, CNPC set mutual supply

The nation's No. 1 oil wholesaler, Nippon Oil Corp., has agreed with China National Petroleum Corp., China's biggest oil company, to begin mutual supply of products, starting in April.

The one-year agreement, signed Friday between Nippon Oil and China Oil, a trading house of CNPC, calls for the two oil companies to supply each other with products for which they have excess production capacities.

At a signing ceremony in the city of Kagoshima, Nippon Oil President Fumiaki Watari said the agreement will help create a stable energy supply system in Northeast Asia, while China Oil President Wang Lihua called for a further expansion of cooperation between the Japanese and Chinese oil companies.

Specifically, Nippon Oil will supply propylene and other materials for resins to the Chinese firm.

Nippon Oil will also refine 50,000 barrels of crude oil per day on behalf of CNPC, up 25 percent from the current volume of refining.

CNPC, for its part, will export 100,000 tons of liquefied petroleum gas for home-use propane to Nippon Oil during the year through next March.