CAPITAL: Taipei

MONETARY UNIT: New Taiwan Dollar

REFINING CAPACITY: 770,000 b/cd

OIL PRODUCTION: 900 b/d

OIL RESERVES: 4 million bbl

GAS RESERVES: 2.7 tcf

Taiwan eased product-import restrictions as part of its drive to liberalize the energy market and meet World Trade Organization requirements.

The cabinet removed a rule restricting Taiwanese producers to importing less than half of their own production.

The Economics Ministry said that would lower Taiwan`s trade barriers and help the island`s bid to join the world trade body.

The government was continuing a program, begun in 1998, to privatize 47 of its 85 state firms by 2001 to prepare for entry to the WTO.

Slow passage of enabling legislation and opposition by interest groups hampered the progress.

Taiwan was selling 15% of Chinese Petroleum Corp. by early 2000. Another 18% would be sold to overseas investors before 2001, and a final block of 30% by June 2001. CPC had assets of $513 billion (Taiwanese) and 18,945 employees.

The Ministry of Economic Affairs sold 123.14 million shares of Taiwan Fertilizer Co., bringing to less than 49% its total interest in the firm. It planned to distribute 84 million shares to the company`s employees, reducing the government`s stake to 35%. CPC said none of its three plants was affected by a major earthquake Sept. 21, 1999. CPC`s 300,000-b/d Taoyuan plant in central Taiwan was nearest to the epicenter.

New refinery

Formosa Petrochemical Corp., a subsidiary of Formosa Plastics Corp., was building a 450,000-b/d refinery to meet local products demand and to supply petrochemical feedstocks.

It was the first privately owned refinery in Taiwan. Completion was due at the end of 2000. CPC said it might decide in 2000 to close one of three refineries due to competition from the new Formosa Petrochemical refinery. The leading candidate was the 270,000-b/d Kaohsiung refinery.

The Formosa Petrochemical refinery was in Mailiao, an industrial zone in Yunlin County about 150 miles southwest of Taipei. The refinery was part of a larger project, which included a port, an independent power plant, a naphtha-cracking plant, and a cogeneration plant. The refinery would provide naphtha feed to a naphtha cracker built in 1998.

The refinery would be completed in three phases, each accounting for 150,000 b/d of crude distillation capacity. The first phase was completed in 1999, and the other stages were due to be finished in June 2000 and September 2000.

The refinery was being built to meet present and expected future domestic demand, mainly for gasoline. Formosa expected growth in Taiwanese gasoline demand to be about 6%/year until 2010.

Natural gas

Tuntex Gas Corp., Taipei, planned a $1.25 billion LNG import project in Kuangtang Industrial Park, in northern Taiwan.

The first stage, to begin in early 2000, was construction of a 3 million-tonne/year LNG terminal, to be completed by June 2003.

The second phase, slated for completion by yearend 2007, would increase capacity to 7 million tonnes/year.

Investors included Tuntex Group, 37.5%; Uni-President Group, 12.5%; Japan`s Mitsubishi Corp., 12.5%; China Development Industrial Bank, 7.5%; Chinese Petroleum Corp., 7.5%; Taiwan Power Co., 7.5%; ARCO, 5%; and Shin Kong Group, 2.5%.

State-owned Taiwan Power Co. entered a contract for Australian LNG for its new Tatan power plant. It was building an LNG terminal near its power station. Tatan would use about 1.8 million tonnes/year of LNG.

The Taiwanese government expected the country`s LNG imports to rise from 4 million tonnes in 1998 to 13 million tonnes in 2010.

Downstream activity

CPC was studying the feasibility of an $82 million, 130,000-tonne/year normal paraffin plant that would come on stream in 4 years.

Ho Tung Chemical Corp., Taiwan`s only normal paraffin producer, was producing 90,000 tonnes/year. CPC planned a gas-fueled power plant at its Taoyuan refinery. The 600-Mw plant would use imported LNG as feed and consist of two generators. Power output would be used mainly by the refinery.

Elsewhere, Nan Ya Plastics Corp. began a test run of its 300,000 tonne/year ethylene glycol plant in Yunlin County.

Nan Ya`s Taiwan production facilities turned out 800,000 tonnes/year of polyester fiber, creating demand for about 280,000 tonnes/year of ethylene glycol feed. It planned to obtain ethylene feed from Formosa Plastic Corp.`s 900,000-tonne/year second naphtha cracker.

Nan Ya planned to build a second 100,000 tonne/year phthalic anhydride (PA) plant at Formosa Plastics`s naphtha cracker complex in Mailiao. The $59.4 million unit was due completion in late 2001.