UpdateFormosa shuts Mailiao refinery, few petchem units after fire

26 July 2010 09:05  [Source: ICIS news]

SINGAPORE (ICIS news)--Taiwan’s Formosa shut its 540,000 bbl/day refinery in Mailiao, along with a number of its downstream facilities on Monday, a day after an explosion at its 73,000 bbl/day desulphurising plant at the complex.

The refinery was shut as a safety precaution, said a company source.

The resulting fire from the blast was just brought under control late "this morning", forcing the shutdown of some plants, including a 520,000 tonne/year group II base oils refinery, said another company source.

There were no casualties from the incident, which was the second to occur at the complex this month, the source said.

Operations at Formosa’s two residual fluid catalyst crackers (RFCC), which have a combined capacity of 168,000 bbl/day and can produce around 650,000 tonnes/year of propylene, were temporarily halted, according to sources close to the company.

The company’s olefin conversion unit (OCU), which can produce 250,000 tonnes/year of propylene, was also down, they said.

Formosa may need to purchase more spot propylene cargoes for its derivative 450,000 tonne/year polypropylene (PP) plant and 160,000 tonne/year crude acrylic acid unit in Ningbo, China, as propylene exports from Mailiao would fall further following the outage, an industry source said.

The company had cut back on propylene exports following a blast at its 700,000 tonne/year No 1 cracker at the site in early July. The cracker was expected to remain off line for two to three months, according to market sources.

The shutdown at the Mailiao base oils refinery would not have a significant market impact, industry sources said, citing that the plant was taken off line just a week ahead of its schedule maintenance turnaround from 1 August.

"Our [base oils] refinery shutdown does not affect domestic delivery and export shipment. Our shipment will be on schedule," said a second source at Formosa.

“We will lose an additional 10,000 tonnes of production due to this shutdown,” said a third Formosa source.

A number of export cargoes of group II base oils had been fixed by Formosa in the past few weeks – and the destinations included SE Asia, India, the Middle East and the US.

“A 100,000 tonne/year bitumen plant run by Simosa, a subsidiary of Formosa, also located in the Mailiao complex was still operating normally, said a company source.

"We still have feedstock inventory so our operation and exports are not affected," said the source.

Reporting by Judith Wang, Felicia Loo, Anu Agarwal and Peh Soo Hwee

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By: Judith Wang
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