Government Agencies Investigate Fire and Explosion at Formosa Petrochemical's Mailiao Refinery Complex

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Researched by Industrial Info Resources (Sugar Land, Texas)--The fire and explosion that caused the shutdown of the Mailiao refinery complex operated by Formosa Petrochemical Corporation (TPE:6505) (FPC) (Taipei, Taiwan) will be investigated by government agencies, including the country's Ministry of Economic Affairs, the Environmental Protection Administration and the National Fire Agency.

July has proven a difficult month for FPC. On July 7, a fire and explosion occurred at the company's No. 1 cracker at the Mailiao complex, located on the west coast of Taiwan, in Yunlin County.

The explosion was believed to have been caused by a leak at the cracker's distillation tower. Following the incident, the 700,000-ton-per-year cracker was closed for repairs. FPC estimated the cracker unit would be closed for a month, with operation now expected to resume in September or October.

Some analysts projected a knock-on effect as the complex supplies propylene for FPC's 160,000-ton-per-year crude acrylic plant in Ningbo, China. They predicted that FPC might have to purchase spot-priced propylene to cover the reduced output from Mailiao.

On July 13, FPC was forced to shut down one of two 84,000-barrel-per-day residue fluid catalytic cracker units at the refinery because of mechanical problems. Following repair work, the unit failed to restart on schedule on July 23.

On Sunday July 25, a fire broke out at a residual hydrodesulfurization (HDS) unit at the complex. The fire, which caused thick clouds of black smoke, was brought under control by noon the next day and was estimated to have caused more than $15 million in damages.

However, FPC's woes continued on July 26, when the Yunlin county government, through its Environmental Protection Bureau, fined FPC $31,000 per day for violating the Air Pollution Protection Act and ordered the immediate halt to operations at the HDS unit.

Despite the thick smoke, no one was injured in the fire, and the results from air samples collected at the site revealed that the smoke was nontoxic. The complex, which is the fifth-largest in Asia, includes more than 60 petrochemical factories, three oil refineries, three naphtha crackers, two plastic factories and captive power generating facilities. The complex has a combined capacity of almost 3 million tons per year of ethylene and processes 540,000 barrels of oil each day.

President Ma Ying-jeo has now ordered the agencies to conduct an evaluation of the cause and impact of the fire to prevent a similar event from happening again. The Minister of Economic Affairs, Shih Yen-shiang, has requested FPC to fully investigate the accident in addition to investigations by Yunlin County Fire Department and the Council of Labour Affairs Inspection Office.

The EPA's director of air quality protection has refused to allow the HDS unit to restart operations until it has passed a safety inspection to be carried out by Yunlin County.

Yunlin County Commissione, Su Chih-feng is supporting the local Mailiao residents who gathered at the FPC gates to protest against the pollution from the plant. The commissioner stated that the county government would support residents and "resort to extreme means" if the central government approved plans by FPC to expand the complex further.

The latest updates on restarts at Formosa Petrochemical say that the company may need one to two weeks to have 66% of the Mailiao refinery fully operational, but it might take a year to restart the residual desulfurization unit that was damaged on July 25.

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