19 November 2004 00:44 [Source: ICIS news]
SINGAPORE (CNI)-Taiwan's Chinese Petroleum Corp (CPC) is making a contingency plan for the imminent shutdown of its 500 000 tonne/year No 5 cracker at Kaohsiung, a company official told CNI recently.
According to an agreement signed with the local residents in Kaohsiung county, CPC can operate the No 5 cracker for only 25 years. This operational agreement will expire in 2014.
However, the cracker shutdown will create ethylene supply problems for several downstream petrochemicals producers in that area. The company's initial plan to encourage the downstream companies such as China Man-Made Fibres Corp (CMMFC) and Grand Pacific Petrochemical Corp (GPPC) to move to a new cracker site at Taixi in Yunlin county fell through because of the high moving cost involved.
CPC is now considering a two-prong solution for the ethylene supply problems, he said. The company is aiming to deliver ethylene to the Kaohsiung petrochemical hub via pipelines from Talin and Linyuan, the official said.
CPC is planning to build a new 1m tonne/year cracker at Linyuan, with the start-up date projected at the end of 2010. The new cracker will replace the company's 26-year-old 230 000 tonne/year No 3 cracker at the same site.
"With the extra 770 000 tonne of capacity, the new cracker will replace the supply lost in the No 5 cracker if it is shut as planned in 2014," the official said.
CPC plans to build a pipeline connecting the Linyuan cracker to its Kaohsiung cracker, with the aim of continuing ethylene supply to its customers at that site, he said.
Besides the Linyuan cracker, CPC will also consider constructing a new 15 000 tonne ethylene storage tank at Talin to cater to its imports, he said. The company is now operating one 15 000 tonne/year storage tank at the same site.
If CPC decides to go ahead with the ethylene storage tank project, it will also have to build a pipeline from Talin to Kaohsiung, the official said.
The official said that CPC is likely to pick up both projects if it decides to shut the No 5 cracker in accordance to the agreement. However, some industry sources said that CPC may hold negotiations with the Kaohsiung authorities to keep the cracker operational beyond 2014, but shut its 270 000 bbl/day Kaohsiung refinery as planned.
The refinery and the cracker are located at the same site in Kaohsiung. As well as the No 3 and No 5 crackers, CPC also operates a 385 000 tonne/year No 4 cracker.
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|