Phase 1 of chemical plant to stay in Taiwan: gov’t

The China Post news staff

The government will not move the first phase of the planned Kuokuang petrochemical complex abroad, which is still pending an environmental impact assessment, a ranking economics official said yesterday. “For the moment, the Ministry of Economic Affairs (MOEA) has made it a top priority to carry out the Kuokuang petrochemical project in Taiwan, and is therefore not considering relocating the project abroad,” Vice Economics Minister Huang Jung-chiou said at a legislative session.

Huang said that the MOEA hopes to implement the first phase of the project in Taiwan as soon as possible to make up for the annual shortfall of 500,000 tons in the domestic supply of ethylene, a substance used for manufacturing plastics and other chemical products, which will occur after the nation’s 5th naphtha cracker plant currently operating in Kaohsiung City by state-run oil refinery CPC Corp., Taiwan is closed in 2015.

Kuokuang Petrochemical Technology Co. (KPTC), an affiliate of CPC, is planning to invest NT$600 billion to build the Kuokuang petrochemical complex in Changhua County’s coastal Dacheng Township to expand CPC’s oil refining and chemical production capacity. The investment volume was recently scaled down from an original NT$900 billion to increase the chances of its passing an environmental impact assessment, amid strong protests by local residents and environmentalists. The complex’s planned ethylene output in phase one of its implementation has also been reduced to 1.2 million tons per year, down from the original target of 2.4 million tons. 400,000 Workers May Be Affected According to Huang, the government hopes the project can go ahead as planned, because if it is scrapped, the livelihoods of 120,000 workers in the local petrochemical industry will be affected. In addition, around 280,000 workers in the downstream manufacturing sector, such as socks and stocking manufacturers, may also lose their jobs if the project is moved abroad.

Huang continued that if the project fails to pass the environmental impact assessment by the Environmental Protection Commission (EPA) in April or May, then the project would be dropped. But if the EPA conditionally passes the assessment, then shareholders of the KPTC will determine whether to proceed with the project after weighing the terms offered by the EPA.

Huang’s remarks came in the wake of reports that the second phase of the Kuokuang petrochemical project might be moved overseas. Just one day earlier, Economics Minister Shih Yen-shiang told reporters that his ministry is seeking a suitable overseas destination for petrochemical investment projects, adding that the Kuokuang petrochemical project may be relocated to another Asian country, should it fail to pass the environmental impact assessment.