TAIPEI (Reuters) - Taiwan’s CPC Corp may shelve a proposed $36 billion offshore refinery and petrochemical plant because of calls for expensive dolphin-protection measures, a top executive at the consortium developing the project said.
Kuokuang Petrochemical Technology Co, a consortium led by state-run oil refiner CPC, has applied to reclaim land in the Taiwan Strait for a 300,000 barrels per day refinery and a petrochemicals complex.
But the government, under increased environmental pressure, is reviewing the offshore project after Kuokuang refused to add a $935 million ocean corridor for the passage of a local dolphin population feared to be endangered.
“We were optimistic at first, but now we’re not so optimistic,” Kuokuang President Tsao Mihn told Reuters in an interview on Thursday.
The firm will scrap the complex, which is expected to produce 2.4 million tonnes a year of ethylene, despite more than four years of planning if the government insists on costly dolphin-protection measures, he said.
“When I do a project, I need to consider my costs,” Tsao said. “We think those measures are absolutely not required.”
The Environmental Protection Administration has rights to spike the project depending on the outcome of a study that began in March and should be done by year’s end, officials say.
If the project goes ahead, the refinery would be the twelfth largest in Asia, according to Reuters data. here
Taiwan’s government says capacity could top 450,000 barrels per day, which would make it Asia’s seventh largest.
While shelving the project would help Taiwan’s pink-hued Indo-Pacific humpback dolphins, which may number just a few dozen, analysts say it would set back Taiwan industry’s competitiveness against fast-growing rivals such as China.
“There are a lot of new complexes like this around Asia, so this would help Taiwan’s market share,” said Aldin Lin, a petrochemicals analyst with KGI Securities in Taipei. “It’s very important. It would have a huge impact on Taiwan’s GDP.”
Taiwan’s petrochemicals industry, the world’s eighth largest, switched in the 1990s from domestic to export-led as much of the downstream demand shifted to China and Southeast Asia.
Kuokuang’s 2,773-hectare complex, on track to be the second biggest on the island after Formosa Petrochemical’s Mailiao refinery complex, would produce ethylene for refining into mid-grade or high-grade parts for manufacturers in Taiwan, China, India or Southeast Asia, Tsao said.
Its would create as many as 10,000 jobs and add 2 to 3 percent to Taiwan’s $390 billion economy if it opened on schedule in 2017, he said.
CPC has a 43 percent stake in the project, with remaining shares divided among eight companies, including Taiwan’s Far Eastern Group and Fubon Financial.
Editing by Himani Sarkar