Idemitsu, Mitsui to integrate Chiba Prefecture ops - Nikkei

May 12 (Reuters) - Chemical maker Mitsui Chemicals Inc (4183.T) and Japan's third-largest refiner Idemitsu Kosan Co (5019.T) are considering integrating their Chiba Prefecture oil refining and ethanol production operations, the Nikkei business daily said.

The companies will establish a limited liability partnership towards the joint management of an Idemitsu refinery and the ethanol plants of both firms in Chiba prefecture, it said.

The two firms would have an output capacity of 927,000 tons of ethanol, or about 13 percent of the amount produced domestically, Nikkei said, adding that combined sales are seen at around 200 billion yen. Idemitsu President Akihiko Tenbo expects the alliance to generate more than 10 billion yen, the daily said.

Currently, Idemitsu's Chiba Prefecture refinery supplies naphtha, a basic material for gasoline, to the company's petrochemical plant as well as the facility run by Mitsui Chemical, Nikkei said.

($1=98.24 Yen) (Reporting by Adveith Nair in Bangalore; Editing by Anil D'Silva)