Tokyo - KUNA
Japan\'s major refiner Cosmo Oil Company and South Korea\'s Hyundai Oilbank Company will act as supply backstops for each other should their refineries shut down due to natural disasters or other unforeseen problems, a leading Japanese business daily reported Thursday, citing company sources. The deal is to cover a two-year period starting this month, with renewal possible annually thereafter, the Nikkei Shimbun said. This marks the first time that a Japanese oil company will sign an agreement with a foreign firm to secure stable supplies in emergencies. In emergencies, the two firms will make supplying crude oil and petroleum products such as gasoline and kerosene to the other a priority, the newspaper said. They will also provide semi-refined products so they can be finished by the receiving company to meet local needs. Each firm will also outsource production to the partner when its own refineries cannot run normally. For example, Cosmo Oil will ship crude and semi-processed oil to Hyundai Oilbank\'s facilities for refining into Cosmo Oil-brand products. In addition, the two companies will cooperate in marine transport by lending oil tankers to each other. They will consider joint transport of finished products. Cosmo Oil and Hyundai Oilbank set up a comprehensive partnership in 2008.