Nippon Oil to halt 1 CDU from early July

TOKYO, June 19 (Reuters) - Nippon Oil Corp (5001.T), Japan's biggest oil refiner, said on Friday it would halt operations at a 110,000 barrels-per-day crude distillation unit (CDU) for at least a month from early July to curb refining amid slow domestic demand.

Major refiners have slashed output in response to weakening demand in Japan, the world's third-biggest oil consumer, though few have so far mothballed capacity.

Nippon Oil expects to refine 3.30 million kilolitres (670,000 barrels per day) of crude oil in July to meet domestic demand, down 25 percent from a year earlier, a company spokeswoman said.

The spokeswoman said the CDU to be halted, the No.2 unit at its Mizushima plant, was originally scheduled to be shut down for scheduled maintenance in October. She said the company has not yet decided whether to keep the CDU shut until it finishes the maintenance.

"We have not set a schedule for the CDU's restart, and that would depend on (domestic) demand," she said.

The company shut the same CDU for nearly a month from mid-November last year to reduce output.

Japan's total oil sales slumped 8 percent in the year ended March 31, the sixth straight year of decline, as the global economic crisis has slowed industrial activity. The crisis has added to already waning demand due to an aging population, a shift towards smaller, fuel-efficient cars and a drive to embrace greener energy sources.

(Reporting by Osamu Tsukimori; Editing by Hugh Lawson)