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Formosa Says 1-2 Weeks Before Two-Thirds of Oil Refinery Online After Fire
Formosa Petrochemical Corp., Taiwan’s only publicly traded oil refiner, said it may need one to two weeks to have two-thirds of its Mailiao oil refinery fully operational after a fire damaged a unit three days ago.
Formosa is preparing to restart one of the crude processing units at the plant and may begin feeding oil to it tomorrow, spokesman Lin Keh-yen said. A Commercial Times report today said it may take a year to restart the residual desulfurization unit damaged by a July 25 fire.
“I am not that pessimistic,” Lin said by phone from Taipei today.
The company shut the 540,000 barrel-a-day refinery for safety reasons after on oil leak triggered a fire at the No. 2 residual desulfurization unit, Lin said on July 26. The blaze was the second accident at the refiner’s Mailiao complex this month. Formosa halted its No. 1 ethylene plant, which has an annual capacity of 700,000 metric tons, on July 7 after a fire.
“Two accidents within three weeks,” said Danny Ho, a Taipei-based analyst at Yuanta Securities Co. in Taipei. “They must raise their standards for maintenance.”
Formosa may need as little as two months to resume production at the residual processing unit and supporting plants, said Ho, who rates the stock a “buy.”
The refinery has three crude distillation units, each able to process 180,000 barrels a day. The plants heat crude and separate it into oil products. Residual desulfurization units remove sulfur from residual fuel.
‘Direct Losses’
The shares climbed 1.6 percent to close at NT$75.80 in Taipei trading at 1:30 p.m. local time. The benchmark Taiex index of equities gained 0.5 percent.
Formosa Petrochemical will “take responsibility” for residents’ financial losses caused by the fire, the company said in a statement on July 26.
A clam farmer told local television channel ETTV on July 26 that pollution produced by the blaze killed some of his clams. Should clams from nearby farms die because of the smoke from the fire, Formosa will compensate farmers, Lin said yesterday. Clams are produced in western Taiwan, including Yunlin.
More than 1,000 ducks were found dead in Mailiao yesterday, Huang An-chin, an official at the Yunlin county’s Animal Disease Control Center, said by phone today. The center has taken samples for a test to determine the cause of the deaths, he said.
“Direct losses” from the fire are estimated at NT$500 million ($15.6 million), the company said in the July 26 statement. The government of the Yunlin county, where Mailiao is located, said yesterday it has decided to fine the company NT$3 million for the smoke produced by the fire.
Formosa Petrochemical operates three ethylene plants with a combined annual capacity of 2.935 million tons.
To contact the reporter on the story: Yu-huay Sun in Taipei at ysun7@bloomberg.net
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