TAIWAN'S SIXTH NAPHTHA CRACKER GETS GREEN LIGHT

Taiwan's petrochemical sector continues to expand. Construction of Formosa Plastics Group's (FPG) often delayed naphtha cracker in the Mailiao industrial zone is scheduled to get under way this month. FPG and government agencies have agreed on a series of issues that had threatened to delay the project again. Frequent delays had led FPG to consider a $6-7 billion petrochemical complex in China as an alternative, but the company later scrapped that project (OGJ, Dec. 7, 1992, p. 35).

July 12, 1993

3 min read

Taiwan's petrochemical sector continues to expand.

Construction of Formosa Plastics Group's (FPG) often delayed naphtha cracker in the Mailiao industrial zone is scheduled to get under way this month. FPG and government agencies have agreed on a series of issues that had threatened to delay the project again. Frequent delays had led FPG to consider a $6-7 billion petrochemical complex in China as an alternative, but the company later scrapped that project (OGJ, Dec. 7, 1992, p. 35).

The $3.3 billion cracker would be Taiwan's sixth and the nation's first privately owned naphtha cracker. It will be the heart of a $7 billion complex that would produce 450,000 metric tons/year of ethylene and 225,000 tons/year of propylene to feed more than 20 downstream plants.

Meantime, Tuntex Distinct Corp. (Tainan) plans to spend $227 million to build plants at Mailiao to produce purified terephthalic acid (PTA) and paraxylene. Tuntex one of Taiwan's biggest producers of polyester, currently produces 350,000 metric tons/year of PTA. Taiwan's three other producers of PTA, China American Petrochemical Corp., ICI, and FPG, plan to increase their PTA capacities by 100,000 tons/year each.

CRACKER PROGRESS

Concerns over obtaining a low interest loan for the naphtha cracker, in addition to questions as to whether land and water would be available, led FPG to warn the project might be delayed again.

The project also has run into environmental opposition.

Philip Wang, director of Taiwan's Industrial Development Bureau, said the Ministry of Economic Affairs (MOEA) promised to expedite issuance of land deeds including those of tracts to be created through reclamation work.

MOEA also agreed to provide FPG a $1.6 billion low interest loan to assist in the project. Of that total, $380 million will come from the Cabinet Development Fund and $720 million from state owned Chiao Tung Bank at a preferential interest rate.

To ensure reliable water supplies, the government agreed to channel water from the Chichi reservoir to the Mailiao industrial zone at a cost of less than 8.2 cents/cu m.

The Council of Labor Affairs (CLA) also is reported to have given tacit approval to FPG's request to import 6,000-8,000 workers for the project. If approved, that could account for almost 80% of the 10,000 foreign workers CLA agreed to allow in 1994.

The giant naphtha cracker is expected to increase Taiwan's economic growth by 1%/year during construction and 1.5%/year when it goes on stream.