Taiwan's Formosa shuts hydrocracker following fire
Taiwan's Formosa Petrochemical Corp has shut its 36,000 barrel-per-day hydrocracker at its Mailiao refinery following a fire last week.
The accident occurred on Jan. 21 and the unit has since been shut for investigation into the incident, said spokesman KY Lin.
It could take until mid-March for the unit to resume operations following repairs, he said.
In the meantime, the refiner has cancelled exports of five gasoil cargoes in February and offered a rare cargo of 180-centistoke (cst) high-sulfur fuel oil (HSFO) for delivery in the same month, Lin said.
The outage fueled concerns of already tight gasoil supplies and pushed refiners' margins for the product and cash differentials for the fuel higher.
Separately, Formosa has reduced operations at its naphtha crackers in January because of weak petrochemical margins, Lin said.
Operating rates at these units were reduced to 90% from 100%, he added.
"Oil prices rose too fast and there were too many new crackers that started operations recently," Lin said.
"Prices for olefins couldn't catch up," he said, referring to prices of raw materials for plastics.
The company is Asia's top naphtha buyer and it operates three naphtha crackers with a total ethylene capacity of 2.93 million tonnes per year.
Formosa will be reviewing petrochemical prices before deciding whether to continue operating at reduced rates in February, Lin said.
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