First batch of ethylene from China arrives in Taiwan

19-Sep-11

In a move that will help it cope with an ongoing ethylene supply shortage, Taiwan's state-owned oil refiner CPC Corp has imported its first batch of ethylene from mainland China, as per CNA. The 6 week annual maintenance and repair shutdown started on Aug. 10 at CPC's fifth naphtha cracker with capacity to produce 500,000 tpa of ethylene, creating a shortfall of 40,000-50,000 tons of ethylene. Also production has been suspended post-Government order at Formosa's No. 6 naphtha, deemed unsafe after a series of fires earlier this year. Hence about 3500 tons were imported from China's Sinopec. Taiwan's annual ethylene imports total 200,000 tons mostly from Japan, South Korea and the Middle East. Of these imports, about 50% is absorbed by CPC, while Formosa Plastics Group and a warehousing subsidiary of China General Plastics Corp. receive the rest. The shipment has proved that the transportation of ethylene across the Taiwan Strait is technically feasible, and could pave the way for cross-strait cooperation in supplying each other's need for raw materials and even convince the Ministry of Economic Affairs (MOEA) to lift the ban on the relocation of the naphtha cracking industry to mainland China. The cargo crossed the Taiwan Strait directly and reached Taiwan's southern port city without having to stop over in a third country first. Previously, such shipments were required to make a detour to a third country port before they could reach their mainland or Taiwan destinations. A major technical hurdle is the high cost of shipping ethylene at a super-low temperature of minus 103 degrees Celsius. The cost of shipping a single ton of ethylene to Taiwan is US$100 if it is shipped from mainland China and NT$250 if shipped from the Middle East.