CPC Corp, Taiwan (台灣中油), the nation’s state-owned oil refiner, will utilize less of its capacity to turn crude into fuels next year on expectations demand may fall further.
The refiner expects to process about 587,000 barrels of crude oil a day next year, or 81.5 percent of its capacity, compared with an estimated 83.8 percent this year, according to the government’s draft budget for next year received by lawmakers.
Taiwanese fuel demand has declined as the economy grew at the slowest pace in more than a year in the second quarter. Losses from selling gasoline, liquefied petroleum gas and fuel oil are prompting CPC to utilize less of its refining capacity, the company’s vice president Chu Shao-hua (朱少華) said yesterday.
“We’re losing money in our refining business,” Chu said by telephone in Taipei, where the company is based. “We’re relying on petrochemicals, as well as exploration and production to make up for the losses.”
CPC forecasts net income for next year to fall 13 percent to NT$5.09 billion (US$161 million), according to the government budget.
Crude oil imports will drop next year as processing rates decrease, Chu said, declining to give details. CPC has three refineries with a combined processing capacity of 720,000 barrels a day, and an ethylene output capacity of 1.08 million tonnes a year. Ethylene, made from naphtha, is a key ingredient in plastics and synthetic fibers.
Taiwan’s consumption of petroleum products fell 4.1 percent from a year earlier in June, the Bureau of Energy said last month. GDP rose 4.32 percent from a year ago in the April-to-June period, the slowest pace since expanding 4.19 percent in the first quarter of last year, the statistics bureau said on Aug. 22.
Production of fuel oil is expected to decline 9.4 percent from this year’s estimate to 6.68 million kiloliters (about 42 million barrels). Gasoline output will rise 1.9 percent to 8.88 million kiloliters next year, while diesel production will increase 2.7 percent to 7.08 million kiloliters, according to the government’s draft budget.
Output of petrochemicals will climb 5.8 percent to 4.19 million tonnes next year.
The refiner has investments in oil and gas fields in Africa, Southeast Asia, the US, Australia and Latin America. In the Taiwan Strait, CPC is developing a field with natural gas reserves of around 6 billion cubic meters, the company said in January 2005. Output is scheduled to start in 2010.
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