Wed, Sep 01, 2010 - Page 11 News List

CPC Kaohsiung refinery to shut down five units

DECOMMISSIONING STARTSAs a result of closing down its Kaohsiung refinery, CPC Corp now expects to be operating at 71 percent of capacity next year

BLOOMBERG

State-run CPC Corp, Taiwan (台灣中油) plans to start decommissioning five units, including a gasoline-making plant at its Kaohsiung refinery, today, making good on a promise made to local residents years ago.

The residual fluid catalytic cracker, which can process 25,000 barrels a day, will be closed permanently, CPC vice president Paul Chen (陳綠蔚) said by telephone in Taipei yesterday.

Two vacuum distillation units, a delayed coker and a gasoil desulfurization plant will also be shut, according to Chen.

“We will start the process step by step from tomorrow,” Chen said.

The company agreed 20 years ago to close its Kaohsiung refinery by 2015 in exchange for local residents allowing the firm to build a new ethylene plant on the site.

CPC operates three refineries — the Kaohsiung and Talin plants in Kaohsiung City and Taoyuan — with a combined processing capacity of 720,000 barrels of crude oil a day.

The oil refiner shut a 50,000-barrel-a-day crude oil unit in Kao­hsiung in 2005.

The vacuum distillation units produce raw material for the residual fluid catalytic cracker, which makes gasoline and diesel. The gasoil desulfurization unit removes sulfur from fuel produced at the delayed coker.

CPC expects to utilize less of its capacity to turn crude into oil products next year after shutting down several units.

The refiner plans to process 509,119 barrels of crude a day next year, or 71 percent of capacity, compared with a projected 80 percent this year, according to the government’s draft budget for next year. CPC currently has the capacity to refine 720,000 barrels of crude daily.

The refiner’s fuel-oil sales will probably drop 16.8 percent next year, compared with a projected 13.8 percent decline in diesel, according to the draft budget. CPC expects to sell 5 percent less jet fuel and 5.4 percent less gasoline.

CPC forecasts that net income for next year will fall to NT$9.61 billion (US$300 million) from NT$12.4 billion projected for this year, according to the government budget.

Meanwhile, state-controlled Taiwan Sugar Corp (台糖) expects production to fall 12.5 percent to 45,602 metric tonnes next year, while electricity sales at Taiwan Power Co (台電) is likely to rise 2.1 percent, the government budget forecast.

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