Minister of Economic Affairs Shih Yen-shiang (施顏祥) told legislators yesterday that Malaysia was one of the overseas sites being considered as an alternative for the planned Kuokuang Petrochemical Park (國光石化園區).
Officials from state-run oil refiner CPC Corp, Taiwan (台灣中油) had visited two sites in Malaysia for feasibility studies, including Port Klang, near Kuala Lumpur, and Johor state, north of Singapore, he said.
Studies are also being carried out in Indonesia, as well as other countries, he added.
“The Kuokuang project will still have Taiwan as the main site under consideration,” Shih said, adding that the alternative sites are being studied concurrently on concerns that the park may not pass further Environmental Impact Assessments, or pass with strict conditions attached that make it less viable.
The multibillion-dollar project was initiated by Kuokuang Petrochemical Technology Co (國光石化) under CPC in a bid to expand oil refining capacity and the production of chemicals such as ethylene.
However, the project, which has gone through more than 20 environmental assessments and been delayed for five years, has met with considerable opposition from environmentalists and residents in Changhua County, the site chosen for the park, over concerns about health risks and damage to oyster and eel farms in the area.
Malaysia said on Saturday that it would assess the Kuokuang project and provide incentives if it is found beneficial to its economy.
On questions raised by Chinese Nationalist Party (KMT) Legislator Lee Ching-hua (李慶華) if the Middle East and China had been ruled out as possible overseas sites, Shih said that these petrochemical investments abroad must follow three rules of thumb: safety, cost effectiveness and marketability.
Shih said the Middle East was too far away from Taiwan and political instability, including recent events that have rekindled fears over the stability of crude oil supplies from the region, mean the area was not on the priority list.
As for China, Taiwan has yet to open naphtha cracking operations in the country, therefore it was currently not an option, he added.
Meanwhile, Shih also shed light on the ministry’s planned measures to counter rising crude oil prices.
“Crude oil costs should continue their upward trend in the second and third quarters. However, average costs for the whole year are expected to be between US$101 and US$110 per barrel,” he said.
Brent crude was trading at US$125.90 a barrel yesterday.
If the price continues to hover around US$120 to US$130 per barrel and after taking currency fluctuations into consideration, the ministry would begin the second-phase of the “one-third” mechanism in which the CPC, the commodity tax and consumers would each absorb one-third of the extra costs.
Government subsidies for agricultural and public transportation sectors would soon follow with the implementation of the “one-third” measure, Shih added.
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