CPC closes its oldest distillation unit

Chinese Petroleum Corp (CPC, 中油), the nation's biggest fuel supplier, said it closed its oldest crude distillation unit in Kaohsiung permanently because of local residents' concerns over pollution, reducing the company's refining capacity by 6.5 percent.

The oil refiner shut the 50,000-barrel-a-day unit late last year, Hwang Jung-shong (黃正雄), general manager at the company's Kaohsiung refinery said in an interview in Kaohsiung on Sunday.

The company may close the refinery and chemical plants on the site by 2015.

Decommissioning of the distillation unit limits the state-run refinery's ability to export fuels.

The company is developing a NT$401 billion (US$12.3 billion) project through its 43 percent-owned venture Kuokuang Petrochemical Technology Co (國光石化), to make up for the lost capacity from Kaohsiung.

"We're closing the plants because we're forced to," Tsao Mihn (曹明), vice president of CPC, told reporters in Kaohsiung on Sunday.

Taipei-based CPC agreed in 1990 to close the Kaohsiung plants by 2015 in exchange for local residents' consent for a new ethylene plant to be built on the site.

Including the closed distillation unit, the facilities can process 270,000 barrels of crude oil a day and make 500,000 tonnes of ethylene a year, equivalent of 35 percent of the company's refining and 45 percent of its ethylene capacity.