Plants and projects: Formosa expansion faces possible delay after fires

09 August 2010 00:00  [Source: ICB]

Taiwan's Formosa Petrochemical Corp. may have to wait longer to secure government approval for its planned expansion in Mailiao, Taiwan, after two fire incidents at the complex last month, according to industry sources.

Taiwanese Premier Wu Den-Yih had given the group an August 6 deadline to submit a report detailing the reasons for the incidents that shut operations at a 700,000 tonne/year cracker on July 7 and at a 540,000 bbl/day refinery and some downstream units on July 25-26, according to local media reports. Wu was quoted as saying the refinery would not be allowed to restart until Formosa identified the cause of the incidents and operational safety was guaranteed. Formosa declined to comment.

The company plans to expand its ethylene capacity by 300,000 tonnes/year and increase the cap-acity of its refinery to 580,000 bbl/day, said Jack Shieh, executive manager of Petrochemical Industry Association of Taiwan (PIAT). Formosa can currently produce 2.93m tonnes/year of ethylene in its three crackers in Mailiao.

The planned Taiwan Dollar (NT$) 280bn ($8.75bn) expansion - which would involve 43 new projects, including chemical intermediates such as methyl methacrylate (MMA) and phenol - is being assessed by Taiwan's Environmental Protection Admin-istration (EPA), said Shieh.

"The expansion permit was supposed to be given to them [Formosa] by the end of the third quarter [of 2010] but because of the fires last month this could be pushed back by half a year," said Danny Ho, a Taipei-based petrochemical analyst at brokerage Yuanta Securities.

Formosa is expected to restart the 700,000 tonne/year No. 1 cracker at the end of September or early October. Maintenance work on its 1.03m tonne/year No. 2 cracker is expected to be postponed from late August to the end of September/early October.

By: Nurluqman Suratman

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