Japanese oil refiner Idemitsu Kosan and Mitsui Chemicals have agreed to begin joint deliberations on optimizing production by consolidating their Chiba ethylene complexes, the company said in a statement.

The companies would consider closing Idemitsu’s Chiba ethylene facility to consolidate production at Mitsui Chemical’s site in the 2027 fiscal year. The new business would be operated by a limited liability partnership or a joint venture.

“Japanese ethylene complexes continue to be forced to operate at a low rate due to both the opening of large new additional petrochemical complexes, mainly in China, and the diminishing domestic ethylene demand,” the statement reads.

“Idemitsu and Mitsui have now agreed to begin considering the optimization of production via the consolidation of their Chiba ethylene complexes, based on the premise outlined below, with the objective of taking their collaborative efforts to date a step further and achieving even greater improvements in the competitiveness of their existing businesses,” they said in a statement.

In 2010, Idemitsu and Mitsui used a limited liability partnership (LLP) to establish Chiba Chemicals Manufacturing LLP and began jointly operating the ethylene facilities owned by both companies in Chiba.