A Liberian-flagged supertanker carrying 2 million barrels of crude oil is to dock at Mailiao Port today, giving Formosa Petrochemical Corp’s (台塑石化) underused refineries a timely boost, a company executive said yesterday.
Formosa Petrochemical president Lin Keh-yen (林克彥) said that the vessel, the FPMC C Lord (君善輪), a very large crude carrier operated by Formosa Plastics Marine Corp (台塑海運), is carrying crude oil from Saudi Arabia and would help ease the company’s tight raw material supplies.
Supply disruptions linked to the conflict in the Middle East and the blocking of the Strait of Hormuz sent Formosa Petrochemical’s overall refinery utilization rate plunging to about 43 percent last month, as several scheduled crude shipments failed to arrive.
Photo: ISNA via AP
The rate for its naphtha cracking facilities alone was about 33 percent in the month.
However, refinery operations are expected to gradually recover with the arrival of the FPMC C Lord — which transited the Strait of Hormuz last month after Iran temporarily reopened the strategic waterway — and Formosa Petrochemical’s diversified procurement strategy, Lin said.
The company has projected that refinery utilization rates would climb to above 60 percent this month and further increase to 80 percent next month, helped by oil sourced from outside the Persian Gulf, including the Red Sea, Gulf of Oman, the Mediterranean and west Africa, he said.
The company moved quickly to implement contingency measures after the outbreak of the conflict, including rerouting shipments and securing alternative crude supplies, he said.
From late March through last month, previously contracted crude cargoes failed to arrive because of the conflict, while replacement supplies could not be secured in time, leading to the sharp drop in refinery utilization rates, he said.
Even with the expected rebound in the use of refining capacity, the company’s petrochemical operations also remain hindered by high costs and weak downstream demand, Lin said.
Formosa Petrochemical shut down its No. 3 olefin plant on March 24, leaving only one ethylene plant in operation, he said.
Despite emergency procurement efforts, the global crude oil market could face prolonged supply shortages if the conflict were to continue, he added.
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