Taiwan's Formosa cuts refinery runs after fire last week

Taiwan’s Formosa Petrochemical Corp has slashed runs at its 540,000-bpd Mailiao oil refinery to about 68%, down from 80%, following last week’s shutdown of a secondary unit due to a fire, its spokesman said.

It was unclear when the affected 80,000-bpd residue desulfurizer (RDS) will be able to resume operations as investigations are ongoing, said spokesman K.Y. Lin.

“Shipments of gasoline and diesel in August, however, would be affected as a result,” he added, without elaborating on the total volumes affected.

Even before the fire, Formosa had previously said that its gasoline exports this year would be about half of its 2019 volumes as the pandemic has hit demand from overseas markets.

Any impact from a reduction in Formosa’s gasoline shipments would be mitigated by ample supplies in the region, said a trader who tracks petrol.

Asia’s gasoline premium to Brent crude was at a three-session low on Friday at $1.37 a barrel.

The Formosa refinery, which operates one of Asia’s 10 largest standalone refineries by capacity, has two RDS units of the same capacity.

A Formosa RDS unit has been hit by fire twice in the past decade, in 2010 and again in 2014, based on Reuters data.

Formosa, Asia’s top naphtha importer, also operates three naphtha crackers in Mailiao.

Two of the units with a total capacity of 1.73 million tons per year (MMtpy) are operating at full capacity and the largest unit at 1.2 MMtpy is running at about 90% of its capacity, said Lin.

The 1.2 million tpy cracker is scheduled to undergo maintenance in August. (Reporting by Seng Li Peng and Shu Zhang; Editing by Richard Pullin)

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