CPC pondering plant in Saudi Arabia

Chinese Petroleum Corp (CPC, 中油), Taiwan's state-owned oil refiner, said it's studying the possibility of setting up a plant in Saudi Arabia to produce chemicals used in plastics.

"We've just started to collect information to evaluate if there's a possibility," of building a plant in Saudi Arabia, CPC spokesman Liao Tsang-long (廖滄龍) said.

The company hasn't yet worked out details such as the feedstock to be used in the plant or a timetable for the proposed investment.

The company's Middle East investment plans come after it faced difficulties in finding land to build a plant in Taiwan for more than five years. The project would include a naphtha cracker and a number of other petrochemical plants.

A venture in Saudi Arabia would be CPC's second in the Middle East, after an investment of US$95 million in Qatar to make methanol and methyl tertiary butyl ether, an additive for gasoline.

A naphtha cracker processes naphtha into petrochemicals including ethylene, a raw material used in making plastics. Methanol is a colorless liquid used as antifreeze, solvent or fuel.

Chinese Petroleum seeks investment opportunities also because of competition from Formosa Petrochemical Corp (台塑石化), another oil refiners and naphtha cracker operators in the nation.

"There's limited growth in the domestic market, so we're looking for development elsewhere," Liao said.