Taiwanese state oil firm Chinese Petroleum Corp. and the Chiayi County government have signed a letter of intent calling for CPC to build Taiwan's eighth naphtha cracker.
The CPC project still requires approval from the central government, a process that depends on the results of an environmental impact assessment. But this latest development brings the proposed project one step closer to reality.
CPC official Liao Chang-Long says the letter of intent is the beginning of a very demanding process. It took the Formosa Group more than a decade after government approval (in 1986) to construct its naphtha cracker complex.
Taiwan Premier Vincent Siew said the CPC project would call for a capital investment of $600 billion (Twn.), or $19 billion (US), making it the largest single industrial project in the nation's history.
CPC Pres. Y.W. Pan said that, when the new complex comes on stream, it will create 2,000 permanent jobs and will generate revenue of more than $435 billion (Twn.)/year. It will also contribute more than $15 billion (Twn.)/year to Chiayi County's tax coffers.
Plans call for the new cracking complex to be built on a site formerly used to produce salt.
Several daily newspapers recently reported that 14 private-sector petrochemical companies that have agreed to take a combined 35% stake in the project are unhappy about the choice of location and have threatened to withdraw from the project. At the signing ceremony, Pan denied these reports and said the other investors have agreed to participate.
Among the companies that will take a stake in the project are: Lee Chang Yung Chemical Industry Corp., Ho Tung Chemical Corp., Tasco Chemical Corp., Taiwan Styrene Monomer Corp., and the Koo's Group.
The project will be completed in three stages over 10 years. When fully operational, the complex will have a crude oil refining capacity of 300,000 tonnes/year and ethylene production capacity of 2.4 million tonnes/year, making it even larger than the country's sixth naphtha cracker, operated by the Formosa Plastics Group.
Meanwhile, CPC announced it will spend as much as $2 billion (Twn.) to increase capacity at its No. 4 naphtha cracker in Kaohsiung County from the current 380,000 tonnes/year of ethylene to 450,000 tonnes/year. A company official said that the major stress of the plan would be elimination of bottlenecks in the current production system.
