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Taiwanese govt give approval to build naphtha cracker in china

Taiwanese govt give approval to build naphtha cracker in china Source:
Date: 28-01-2014
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A consortium led by Taiwan's USI Corp. is planning to build naphtha crackers at a petrochemical complex partly owned by China Petrochemical Corp., or Sinopec Group, in the Gulei Petrochemical Zone in Zhangzhou city, located in China's eastern Fujian province. The crackers are expected to produce ethylene and propylene.
Taiwan's government on Monday gave approval to a group of seven firms to invest US$263.6 million to build naphtha crackers at a petrochemical complex in China, in the first regulatory approval since lifting a ban on investments in China's downstream petrochemical industry in early October.
The island's petrochemical industry has been seeking investment opportunities in China after government-linked Kuokuang Petrochemical Technology Co. failed in the past two years to find a suitable site in Taiwan or Malaysia to build a much-needed naphtha cracker.
Analysts are of the view that that Taiwan's downstream petrochemical companies might face a shortage of the feedstock. Taiwan is a net importer of ethylene, producing 3.47 million metric tons in 2012 according to the latest available data and importing around 348,000 tons.
An official from the ministry added that the consortium has agreed to ship the output from Gulei back to Taiwan in case of a local shortage. The plan hasn't yet garnered approval from the Chinese authorities and is likely to take two years before production begins.
Apart from the Gulei project, Formosa Plastics Group, among the most active Taiwanese petrochemical firms investing in China, has flagged an interest in building ethylene plants in Zhejiang and Fujian provinces. The company currently produces petrochemical products such as ethylene glycol and polyvinyl chloride in its Ningbopetrochemical complex in Zhejiang province.
The removal of restrictions came as economic exchanges across the Taiwan Strait have been increasing and Taiwanese petrochemical producers are searching for new sites to build more naphtha crackers to help meet Taiwan's rising domestic demand.
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