Mai Liao, Taiwan


Formosa Petrochemicals has a number of petrochemical plant expansions underway at its site at Mai Liao, on the western coast of Taiwan. These projects have been able to continue despite the earthquake in 1999, which left the Mai Liao area unaffected. The owner of the plant complex is the Formosa Group, a private Taiwanese firm first established in 1954.

ETHYLENE CRACKER SUPPLIES PETROCHEMICAL COMPLEX

The first ethylene cracker to be constructed at the site acted as the centrepiece of an extensive petrochemical complex with a total of 19 plants. The ethylene cracker provided feedstock to the surrounding plants. However, the supply was outstripped by the demand as the company put more and more derivatives plants at the site. Formosa's Mai Liao complex now includes units to produce 154,000t/yr benzene, 20,000t/yr toluene, 102,000t/yr orthoxylene, 185,000t/yr paraxylene, 200,000t/yr styrene, 450,000t/yr ethylene and 250,000t/yr propylene, 270,000t/yr high-density polyethylene, 360,000t/yr poly vinyl chloride and 360,000t/yr vinyl chloride monomer. The company therefore decided to invest in a second ethylene production facility at Mai Liao, in order to increase its supply of feedstock.

The operation of the first plant was problematic throughout 1999. This was for a number of technical reasons, including an insecure power supply. The company gradually added operating furnaces during the course of 1999, but it was not until the end of 1999 that it was able to open all nine of the furnaces in the facility. The production hitches in the first plant have further exacerbated the company's problems in supplying feedstock to the surrounding petrochemical plants.

NEW ETHYLENE FEEDSTOCK PLANT

In 1998, Formosa ordered a second ethylene plant to increase its feedstock supply. This was an enormous facility capable of producing one million tonnes per year of ethylene, and 450,000t/yr of propylene. The new complex also sees Formosa producing an additional 140,000t/yr of butadiene. ABB Lummus provided the process package, procurement service, technical supervising and assistance with construction and commissioning. The detailed engineering was carried out by Toyo Engineering Corporation (TEC), a well-known Japanese contractor.

The new ethylene facility did not open until the October 2000, and as the largest naphtha cracking plant in the world, produces over one million tonnes per year of ethylene. Together the two naphtha cracking plants make a combined potential capacity of 1.5 million tonnes per year, and will run at approximately 1.35 million tonnes per year. Total investment runs at approximately NT $400billion (US $11.4billion).

Actual commissioning of the new facility began in October 2000. The plant was operated at around 50% of nameplate capacity for a few months to enable any maintenance work to be carried out. The caution in starting up the second facility is partly a result of Formosa's difficulties in getting the first plant to run consistently.

Despite the opening of the new ethylene facility, Formosa was still forced to buy in extra ethylene supplies to supply feedstock to its other petrochemical facilities. As the price of ethylene on the spot market was rising very quickly during the course of the early part of 2000, this was not the ideal solution. The company can therefore be expected to continue to invest in new facilities as circumstances allow.

A total of 58 plants will be built within the industrial zone including an oil refinery, a naphtha cracking plant, a co-generation plant, heavy machinery plant, and petrochemcial-related plants. Piping within the plant extends to over 3000km.

POLYETHYLENE PRODUCTION SACRIFICED

In late 1999, the continuing need for more ethylene saw suggestions that the company could add more furnaces to its existing naptha cracker and thus produce more ethylene. One problem with running the ethylene facilities at full stretch (as the company is currently forced to do in order to maintain its supplies to its derivative plants) is that the proportion of propylene produced is reduced. The company is also forced into other choices it would probably prefer not to make. Therefore, in 2001, Formosa reduced polyethylene output in order to maintain ethylene supplies to its styrene plant, which it is currently in the process of commissioning.

However, this solution does not solve the company's other feedstock problem, the price of naphtha. The company is forced to use a large amount of naphtha as feedstock for its ethylene production. Whereas other ethylene producers can use butane, the Formosa facilities are only technically capable of producing from feedstock which is not more than about 20% butane. This makes the company's feedstock procurement rather inflexible.