CAPITAL: TAIPEI
MONETARY UNIT: NEW TAIWAN DOLLAR
REFINING CAPACITY: 920,000 B/CD
OIL PRODUCTION: 600 B/D
OIL RESERVES: 4 MILLION BBL
GAS RESERVES: 2.7 TCF

After a change in governments, Taiwan made major changes in its energy policy, opening up the natural gas and power markets and reducing the role of the state-owned oil and gas monopoly Chinese Petroleum Corp. (CPC).

The government also planned to deregulate and expand the gas industry to meet the requirements of the power generation sector. The government planned to more than triple Taiwan's use of natural gas by 2010.

The Ministry of Economic Affairs (MOEA) abolished the mandated formula under which CPC was permitted to set product prices.

The formula permitted CPC to adjust its prices a maximum 3%/month and a maximum of 6% in any 3-month period.

With the entry of Formosa Oil Corp. in the market, MOEA agreed to CPC's request to end the mandated pricing system.

CPC officials said that the price of domestic oil products would be determined by market forces.

Oil market competition began in 1999 with completion of a refinery at Mailiao owned by Formosa Petrochemical Corp., an arm of the private Formosa Plastics Group. FPC intended to capture half of the country's domestic gasoline market with the 450,000-b/d refinery.

Petrochemicals

MOEA was working on a policy to relax restrictions on investment in mainland China by the island's upstream petrochemical makers.

Under the terms of the proposed amendment, small and medium-sized companies would be allowed to invest a maximum of $60 million (Taiwan), while the amount large, publicly owned companies could invest would be 20-40% of their total paid-in capital.

CPC and the Chiayi County government signed a letter of intent calling for CPC to build Taiwan's eighth naphtha cracker.

The $600 billion (Taiwan) project would be completed in three stages over 10 years. When fully operational, the complex would have refining capacity of 300,000 tonnes/year and ethylene production capacity of 2.4 million tonnes/year.

CPC would spend as much as $2 billion (Taiwan) to increase capacity at its No. 4 naphtha cracker in Kaohsiung County from 380,000 tonnes/year of ethylene to 450,000 tonnes/year.

Grand Pacific Petrochemical Corp. would spend $12 million (Taiwan) to expand the capacity at its 80,000 tonne/year Zhenjiang acrylonitrile butadiene styrene (ABS) resin plant to 1.2 million tonnes/year.