Taiwan's Formosa plans to operate refinery at lower rate after maintenance

SINGAPORE (Reuters) - Taiwan’s Formosa Petrochemical Corp plans to operate its refinery at a reduced rate after completing maintenance at some units later this month amid weak margins, its company spokesman said on Monday.

Refineries globally are reducing utilisation rates to cope with a sudden plunge in domestic demand and negative gasoline margins as governments impose more stringent lockdown measures.

The company is expected to restart one of its three crude distillation units (CDUs), its residue fluid catalytic cracker (RFCC) and one of its two residue desulphurizers (RDS) around April 20 after more than a month’s shutdown for scheduled maintenance.

After the unit’s restart, Formosa plans to be processing 480,000 barrels per day (bpd) of crude, spokesman KY Lin told Reuters, about 10% below the refinery’s nameplate capacity of 540,000 bpd.

The company is also looking at adjusting output at its 84,000-bpd RFCC to maximize production of propylene, a petrochemical raw material, as prices are still supportive, while reducing gasoline output, he said.

He added that the refinery has previously reduced jet fuel output partly by blending the fuel into its diesel and naphtha pool.

“We won’t rule out further run cuts,” he said, adding that oil supply remained excessive globally.

Formosa operates three CDUs with a capacity of 180,000 bpd each, while the capacity of each of its RDS units is 80,000 bpd.

Reporting by Florence Tan, editing by Louise Heavens