Iran General NewsMitsubishi waiting for Japan’s guidance on Iranian oil contract

Mitsubishi waiting for Japan’s guidance on Iranian oil contract

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Bloomberg: Mitsubishi Corp. (8058), Japan’s biggest trading company, is among crude oil buyers waiting for the government to decide whether the Asian country needs to cut imports from Iran. Bloomberg

By Ramsey Al-Rikabi and Yuji Okada

Mitsubishi Corp. (8058), Japan’s biggest trading company, is among crude oil buyers waiting for the government to decide whether the Asian country needs to cut imports from Iran.

Mitsubishi buys Iranian crude and condensate, a light oil produced during natural-gas extraction, to supply Japanese refiners, Shunsuke Nanami, a spokesman in Tokyo, said in a phone interview yesterday. The company is waiting for an official decision on how to proceed with supply contracts amid international sanctions against the Islamic Republic, he said.

Japan plans to propose cutting Iranian crude purchases by at least 11 percent annually in order to gain an exemption to a U.S. law that would punish banks that do business with Iran, according to a government official Feb. 21. Refiners have been unable to renew some term contracts for 2012 until they receive direction from the Ministry of Economy, Trade and Industry.

“The discussions with the U.S. are making progress,” Yukio Edano, Japan’s trade and economy minister, said this week. “I can’t disclose the status of the ongoing discussion because the talks involve a counterparty.”

JX Nippon Oil & Energy Corp. (5001), Japan’s largest refiner by capacity, buys as much as 33,000 barrels a day of Iran’s South Pars condensates through a long-term contract with Mitsubishi, which is supplied by National Iranian Oil Co., according to two officials at both Japanese companies, who declined to be identified because the information is confidential.

JX Nippon processes the liquids ain a 63,500 barrel-a-day condensate splitter at its 189,000 barrel-a-day Kashima refinery near Tokyo, two of the officials said.

The refiner has contracts to buy as much as 83,000 barrels a day of Iranian crude, which includes the deal with Mitsubishi, according to officials from both companies. An additional 10,000 barrel-a-day supply deal with the Islamic Republic is yet to be renewed.

Mitsubishi’s Nanami declined to provide details on specific contract deals. Ghassem Mohsenian, the managing director of NIOC’s Singapore office, was not available for comment.

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