InterviewTaiwan group moving forward on $5bn Quanzhou petchem project

15 September 2009 10:35  [Source: ICIS news]

SINGAPORE (ICIS news)--The Taiwan Petrochemical Industry Association (PIAT) expects to complete the feasibility study and documentation on its proposed multi-billion dollar petrochemical project in Quanzhou, China a month from now, its group executive manager said on Tuesday.

“Total investment is around $5bn (€3.4bn), including the upstream 1m tonne/year naphtha cracker and 25 downstream units,” said PIAT executive Jack Shieh, in an interview with ICIS news.

The cracker alone would cost around $1.5bn to build. The downstream plants would include a 400,000 tonne/year PP plant, a 500,000 tonne/year SM unit, a 160,000 tonne/year methyl tert-butyl ether (MTBE) facility, a 60,000 tonne/year methyl ethyl ketone (MEK) plant, based on a previous story ran by ICIS news.

A 350,000 tonne/year vinyl acetate monomer (VAM) unit and a 30,000 tonne/year acrylonitrile butadiene rubber (NBR) plant will also be built at the site.

Project funding would probably be in the form of loans from overseas banks, said Shieh, adding that he foresaw no problem in financing the project despite lingering tightness in the credit market.

PIAT represents six of its member companies that would equally invest and own 72% of the project in the discussions with the Chinese authorities, which would have the remaining 28% stake in the project, Shieh said.

These companies include Ho Tung Chemical Co, Dairen Chemical Corp, Lee Chang Yung Chemical Industry Co, Chang Chun Plastic Co, Grand Pacific Petrochemical Co and Taiwan Synthetic Rubber Corporation (TSRC).

A new company would be set up to undertake the project in China's southeastern Fujian province, Shieh said.

PIAT signed a letter of intent (LOI) last week to do a feasibility study on the planned petrochemical complex, Shieh said.

“We expect that within one month, we will submit all the documents to the central government of China for approval,” he said. “If they say 'okay', then we will proceed.”

The PIAT official said he was optimistic about getting the green light from the authorities, given their common long-term goal of promoting better business and investment opportunities between China and Taiwan.

"One problem is the application to the Taiwanese government for approval. We [still] need to persuade [the] government," Shieh added.

The petrochemical complex would mostly cater China's domestic needs, to reduce the country's reliance on imported petrochemical raw materials, but exports were not being ruled out, Shieh said.

($1 = €0.68)

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By: Pearl Bantillo
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