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Formosa Plastics to Invest $1.5 Bln in the US = 300 MW Petcoke Cogen, Taiwan=60MBD crude/coker exp

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This topic contains 4 replies, has 3 voices, and was last updated by  Charles Randall 14 years, 3 months ago.

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  • #4256

    Anonymous

    Formosa Plastics Plans to Invest $1.5 Bln in the U.S., Taiwan
    Jan. 13, 2006 (Bloomberg) — Formosa Plastics Group., which owns the world’s biggest processor of plastics for pipes and imitation leather, plans to invest as much as $1.5 billion in the U.S. and Taiwan to tap rising demand for chemicals and energy.
    The parent may invest $1.1 billion in Texas in the next five years to expand chemical production and build a power plant, plus as much as $400 million in Taiwan to boost chemical output, said Lee Chih-tsuen, president of Formosa Plastics Corp., the group’s oldest company.  Formosa Plastics Group is expanding as it seeks to gain market share from rivals including Dow Chemical Co. of the U.S. and Germany’s BASF AG. The company is betting U.S. economic growth will prompt higher demand for chemicals used in construction, computers and consumer products including handbags, shoes and diapers.
    “Demand for petrochemicals usually moves in tandem with the gross domestic product,” Lee, 70, said in an interview at his office in Taipei yesterday. Formosa Plastics is expanding in the U.S., because “market demand is there.”  The U.S. economy will grow at a 3.4 percent annual rate this year, according to the median forecast in a Bloomberg News survey of 72 economists.
    Formosa Plastics’ U.S. plan “will help cut costs by bringing production closer to the market,” said Kuo Shou-ming, a fund manager at SinoPac Securities Investment Trust Co. in Taipei. “The U.S. and China are the world’s biggest petrochemical markets, so they would want to maximize market share there.” Kuo oversees the equivalent of $59 million of assets including shares of Formosa Plastics Group units Formosa Petrochemical Corp. and Nan Ya Plastics Corp.
    PVC
    The parent plans to build an 180,000-ton-a-year polyvinyl chloride, or PVC, plant in Texas, and a 300-megwatt power plant that will burn petroleum coke, a cheaper alternative to natural gas, Lee said. The group will also expand ethylene production capacity in the U.S., he said. Ethylene is a basic chemical used in most plastics. Formosa Plastics’ plants at Point Comfort, Texas account for 4.4 percent of North American ethylene capacity. The group also has natural gas assets and makes PVC among other chemicals in the U.S.
    In Taiwan, Formosa Plastics is seeking government approval to spend between $300 million and $400 million in the next three to four years on plants making acrylic esters and super absorbent polymers, according to Lee. Acrylic esters’ applications include paint and adhesives, while super absorbent polymers are used in products including diapers.
    Mailiao
    The Taiwan plan will add to the group’s NT$652.8 billion ($20.4 billion) petrochemical venture in the western town of Mailiao, where Formosa Plastics already has plants capable of producing 1.7 million metric tons of ethylene a year and processing 480,000 barrels of crude oil a day. Formosa Plastics will boost the capacity of its Mailiao refinery to 540,000 barrels a day before the end of the year, according to Lee. Construction of an ethylene plant that has an annual capacity of 1.2 million tons is also proceeding.
    The parent company has been in talks with governments in Taiwan and the Chinese mainland for a chemical project in Eastern China’s Ningbo city, Lee said. The proposal, including a 1.2 million-ton-a-year ethylene plant, may cost between $3 billion to $5 billion. “If the mainland doesn’t build new plants, the shortage will continue to widen,” prompting Formosa Plastics to keep prodding the Taiwan government to allow the project, Lee said. China imports about 10 million tons of ethylene a year, he said.
    Increasing Demand
    China uses about 16 million tons of ethylene a year and the nation’s demand for the feedstock increases by more than 1 million tons every year, according to Lee. The Taiwan government bans companies from building ethylene plants in China, on the grounds such projects will siphon too much investment from the island, harming Taiwanese chemical producers. Taiwan limits investments on the mainland because of concern these may lure business away from the island. China, already the biggest recipient of Taiwan’s overseas investments, considers the island a breakaway province and threatens to use force to bring about unification.
    Formosa Plastics Corp. has a plant in Ningbo to produce PVC, which is used to make window frames and floors among other plastic products. The company is test running an acrylic esters factory there and building factories that will make polypropylene and super absorbent polymers, according to Lee.  Nan Ya Plastics, the world’s biggest processor of plastics for pipes and imitation leather, has about 30 plants in China that make plastic pipes, synthetic leather, and components for printed circuit boards.

     
    To contact the reporter on the story:
    Yu-huay Sun in Taipei  ysun7@bloomberg.net
    Last Updated: January 13, 2006 00:57 EST




     
    ——————
    Submitted by  



    Charles E. Randall
    Pace Global Energy Services
    Progect Manager
    808 Travis Street Suite 1107
    Houston, TX 77002
    Direct: 713-315-5666
    Mobile: 281-813-2669
    Fax: 713-222-7520
    Email: randallc@paceglobal.com

  • #7668

    Charles Randall
    Participant

    Formosa Plastic announced plans for PVC plant in Texas along with a 300MW Petcoke power plant, and Tap rising demand for both chemicals & energy (Formosa currently has existing PVC plant at Baton Rouge, LA).
     
    It is also looking to expand its Mailiao, Taiwan refinery & petchem plant from 480 MBD crude to 540 MBD By the end of 2006.
     
    The existing Mailiao Delayed coker is 36 MBD unit, and may require expansion (since the coker Raio is already below 10) with this size of crude rate increase, however Formosa also has a 70 MBD Resid desulfurizer and runs mostly lighter Middle Eastern crudes (Kuwait, Iraq, Iran & S. Arabia Light).
     
    Formosa Plastic in Taiwan had the first major IPP in 1999 when it brought online the Formosa owned Mailiao Power plant a 2,400 MW coal fired power plant, which sells 75% of electricity to Taipower. It also operates a plant cogen to produce steam, power and air for plant needs via two 46 MW NG turbines.
    (This plant cogen was to be replaced by petcoke cogen once the petcoke production  became available after 2002 Startup.)
     
    Regards
    Charlie Randall
    Pace Global Energy Services
    Progect Manager
    808 Travis Street Suite 1107
    Houston, TX 77002
    Direct: 713-315-5666
    Mobile: 281-813-2669
    Fax: 713-222-7520
    Email: randallc@paceglobal.com

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    Anonymous

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    Anonymous

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