November 29, 2016 / 7:40 AM / in a year

UPDATE 2-Japan's Idemitsu JV plans to expand LPG use at naphtha cracker

* Cracker to be shut during upgrade planned for autumn 2017

* Cracker’s capacity to process propane could quadruple

* Already set to be shut next spring for planned maintenance (Adds detail in second and fifth paragraphs)

TOKYO, Nov 29 (Reuters) - Japan’s Idemitsu Kosan said on Tuesday its joint venture with Mitsui Chemicals would conduct work to expand the processing of propane at Idemitsu’s naphtha cracker to take advantage of cheap liquefied petroleum gas (LPG) prices.

The work will be carried out next autumn and last about a month, during which time the cracker will be shut, a company spokeswoman said.

The upgrade will boost the cracker’s capacity to process propane as feedstock by three or four times, said Hideki Gotoh, deputy general manager of Idemitsu’s petrochemical business. He declined to give the current capacity.

He added that Idemitsu would pay the costs for the upgrade, without giving a figure.

The benefit from boosting propane and cutting naphtha as feedstock is set to lead to cost cuts of around 1 billion yen ($8.90 million) a year, the company spokeswoman said.

The cracker will take advantage of its location next to the LPG import facility in Idemitsu’s Chiba refinery. It will mainly rely on LPG imports for feedstock rather than a small quantity of LPG produced at the plant, officials said.

The cracker is separately scheduled to undergo planned maintenance next spring, company sources said.

Idemitsu and Mitsui Chemicals set up the 50:50 venture in 2010 to jointly operate their naphtha crackers in Chiba, east of Tokyo, to save on costs.

Idemitsu has a naphtha cracker adjacent to its Chiba refinery with capacity to produce 414,000 tonnes per year of ethylene, while Mitsui has one with a capacity of 612,000 tonnes per year. ($1 = 112.3700 yen) (Reporting by Osamu Tsukimori; Editing by Tom Hogue and Joseph Radford)

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