Formosa Petchem may delay cracker start-up again

02 February 2007 07:20  [Source: ICIS news]

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By Nurul Darni

SINGAPORE (ICIS news)--Formosa Petrochemical Corp (FPCC), the Taiwanese chemicals and refining major, might again delay the start-up of its largest cracker to the fourth quarter and reduce its capacity due to land shortage, sources close to the project said on Friday.

A rush towards the new start-up timeframe, however, could face another setback if the company has to go back to the drawing board and redesign the cracker’s capacity which could delay the start-up considerably.

"We are facing some problems now with land shortage. The existing land is not sufficient to accommodate the size of the No 3 cracker and we are looking at a November or December start-up now," said a source at the project’s main contractor, CTCI Corp, who declined to be named.

The 1.2m tonne/year cracker project at Mailiao was earlier scheduled to start up at end-2006, but was delayed to the second quarter of this year due to labour shortage and problems with securing construction materials.

The CTCI source said they would need to "go back to the design table in March and rebuild the cracker by reducing its capacity".

"We may need to redesign the cracker’s capacity and reduce it by half to 600,000 tonnes/year," the source said, adding that the basic redesigning of the new cracker would take up to six months for completion.

The FPCC spokesman declined to comment.

The cracker project, which can produce 1.2m tonnes/year of ethylene and 600,000 tonnes/year of propylene, was expected to have a large impact on olefins demand supply balance in northeast Asia.

An olefins conversion unit, producing 250,000 tonne/year propylene, was also due to start up with the cracker.

FPCC would have pushed its completion date by almost a year from initial estimates, which could have repercussions on its downstream projects in Mailiao and in Ningbo, Zhejiang province, China.

These include a 700,000 tonne/year styrene monomer (SM) project at Formosa Chemicals and Fibre Corp (FCFC) and Nan Ya Plastics’ monoethylene glycol (MEG) and bisphenol-A (BPA) projects.

The Formosa group also has a 300,000 tonne/year polypropylene (PP) project in Ningbo.

"This is a massive project and such problems occurring sometimes are inevitable," one olefins trader said.

FPCC was also increasing its propylene capacity at its refinery from 400,000 tonnes/year to 1,900 tonnes/day (684,000 tonnes/year).

The company’s total propylene capacity was suppose to reach 2.5m tonnes/year and its ethylene capacity was to be close to 3m tonnes/year after completing these projects.

By: Nurul Darni
65 6789 4359

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