FPG

No. 6 Naphtha Cracker Project

With the lack of petrochemical raw materials restricting the development of local downstream industries, we proposed the No. 6 Naphtha Cracker Project to alleviate the situation. This project includes the building, at Mailiao and the Hai Fong Industrial Zone, of oil refineries capable of refining 21 million MT of crude oil, ethylene plants with an annual capacity of 1.35 million MT, other related petrochemical plants, a heavy machinery plant, a co-generation power plant, and the Mailiao Industrial Port. The total investment in phases one and two of the Project exceeds US$13.5 billion. The first phase of the Project, the construction of plants at Mailiao was completed in 1998; the second phase, the plants at the Hai Fong Industrial Zone, started operation in 2001. Planning for phase three expansion commenced in 2002. This will involve further investment of US$2.07 billion bringing total investment to US$15.6 billion.

In addition, in view of the serious shortge of electricity in recent years affecting Taiwan's economic development, a 3 million kilowatts power plant is being built. The power generated by this plant will be sold to Taipower to augment the local power supply.

Completion of the No. 6 Naphtha Cracker Project has raised Taiwan's self-sufficiency rate for ethylene from 38% in 1994 to 92% in 2001, and boosted output by US$17.6 billion and GDP by 6.7%. The project has an annual import-substitution value of around US$1.84 billion. It has stimulated development and increased output from middle- and downstream industries worth US$57.5 billion, increased government tax revenues by over US$700 million annually and directly created 100,000 jobs.

The Mailiao and Hai Fong areas that accommodate the No. 6 Naphtha Cracker Project are situated on a seabed along the western coast of central Taiwan. The two areas have a waterway segregating them from the fish farms along the coast It is approximately 8km long from south to north and protrudes about 4km into the sea. A large section of the site lies below sea level and at low tide one can observe sandy land that is totally submerged during high tide. The Project requires massive land reclamation efforts that will create 2,096 hectares of new land, approximate ly 8% the size of the Taipei Metropolitan area. Geological improve ment to firm up the foundation is required before plants can be built. Mailiao is located in a region where a northeast monsoon blows half of the year. Inconvenient transportation and poor weather make the reclamation work formidable.
The No. 6 Naphtha Cracker Project, consists of more than 50 large-scale petrochemical plants including the following:

(1) Mailiao Industrial Port

Mailiao Port in the project occupies an area of 476 hectares, comparable to the size of Taichung Port (487 ha) and more spacious than Keelung Port (384). With water level 24 meters deep during mid-tide, the Port can accommodate vessels of 260,000 tonnage. It will become Taiwan's deepest port and the first privately funded industrial port. Upon completion, the Port can handle up to 60 million tons of cargo a year in the preliminary stage, second only to Kaohsiung Harbor. Although Mailiao Port will be used for industrial purpose only, its operations in Yunlin County will incorporate the vast area of hinterland in the vicinity into the port zone. Consequently, the convenient marine transportation will promote the development of local industry.

(2) Independent Power Plant

The project plans to install a large thermal power plant equipped with five sets of generating units that will each generate 600,000 kW of electricity. The combined output of the three completed sets of generators is 1.8 million kW. Since they officially started production in June 1999 and September 2000, all energy generated has been sold to Taiwan Power Company and incorporated into the national power grid (Taipower's total capacity in 2001, including that from IPPs, came to 30.14 million kW). This contribution has gone a long way to easing Taiwan's power shortage.

(3) Oil Refinery

The oil refinery will process 21 million tons of crude oil each year at 450,000 barrels a day (Chinese Petroleum processes 770,000 barrels of oil each day in total at its refineries in Kaohsiung, Taoyuan and Ta-lin-pu after fifty years of development). Upon completion, the refinery will produce 3,840,000 tons of naphtha that will be furnished exclusively to all project-related plants.

(4) Naphtha Cracking Plant

The two naphtha cracking plants will generate 1.35 million tons of ethylene a year in total (Chinese Petroleum now has an annual output of 1.02 million tons). Once bottle-neck clearing construction is completed on Plant 1 at the end of Oc to ber 2002, annual production capacity will in crease to 1.70 MT.

(5) Co-generation Plant

The plant will generate electricity, steam, industrial water, acid soft water, ultra-pure water, nitrogen, oxygen and compressed air for use by project-related plants. The plant currently has 10 generator sets installed, with a total capacity of 1.82 million kW. The excess electricity produced, after supplying manufacturing needs, is sold to Taiwan Power Company. In an additional move to guarantee the supply of steam needed in the industrial zone, a 500 T/H boiler is being installed in the Mailiao zone. It is scheduled to start operation in late January 2003.

(6) Machinery Shop and Boiler Shop

The machinery shop is primarily engaged in the design, manufacturing and installation of petrochemical process equipments (reactor, tower, pressure vessels, earth covered tank etc.). Manufacturing capability exceeds 10 meters in diameter, 100 meters in length and 1000 tons in weight (10Mφx100MLx1,000MT). The boiler shop is mainly engaged in the planning, design, manufacturing, installation and construction of the 50-150 MW co-generation power plant and the 600 MW independent power plant.

(7) Wafer Fabrication Plant

This wafer plant is a joint venture of Formosa Plastics, Asia-Pacific Investment and Komatsu Electronics of Japan for the production of 8-inch wafers with an annual output of 2.4 million pcs. The investment totals US$246 million. Work was completed in March 1999. In December 1999, the plant attained ISO 9002 certification and in March 2001 the plant was awarded ISO 14001.

(8) Formosa Asahi Spandex Co. Ltd.

Formosa Asahi Spandex Co. is a US$74.7 million joint venture of Formosa Plastics and Asahi Chemical. The plant's annual production capacity is 5,000 tons per year. The Phase 1 project, with 2,500 MT capacity, was completed in the third quarter of 2000. The 2,500 MT phase 2 project is slated for completion at the end of 2001. Further investment of US$14.4 million will expand the plant, allowing annual production of 10,000 MT of polytetramethylene glycol (PTMG). Work is scheduled to be completed in June 2002.

(9) No. 6 Cracker Project Phase 1 and 2 Investments (see table)

Investing Company	Item	Factory	Product	Capacity (10000 MT/yr unless otherwise noted)
Formosa Plastics Corp.	1	Acrylic Acid & Ester plant	AA/AE	9/10
	2	Polyvinyl Chloride plant	PVC	45.6
	3	Vinyl Chloride Monomer plant	VCM	60
	4	Caustic Soda plant	CS	66.7
	5	High Density Polyethylene plant	HDPE	24
	6	Carbon Fiber plant	Carbon Fiber	0.1
	7	Ethylene-Vinyl Acetate plant	EVA/LDPE	20
	8	Acrylonitrile plant	AN	20
	9	Linear Low Density Polyethylene plant	LLDPE	24
	10	Methyl Methacrylate plant	MMA	7
	11	C4 Plant	MTBE/B-1	15.1/1.7
	12	Epichlorohydrin plant	ECH	8
Nan Ya Plastics Corp.	1	Plasticizer plant	DOP	34.16
	2	Epoxy Resin	EPOXY	13.13
	3	Propionic Anhydride plant	PA	10
	4	Isooctanol plant	2EH	15
	5	Bisphenol A factory	BPA	9
	6	Ethlene Glycol plants 1&2	EG	60
	7	Hydrogen Peroxide plant	ESO/H₂O₂	2/2
	8	1,4-Butylene Glycol plant	1,4-BG	4
	9	Toluene Diisocyanate plant	TDI	9
	10	Iso-nonyl Alcohol plant	INA	20
	11	Antioxidant plant	AO/CPE	0.4/1
Formosa Chemicals & Fibre Corp.	1	Aromatic Hydrocarbon plants 1&2	BZ/PX/OX	62.4/63/20
	2	Styrene Monomer plant 1&2	SM	45
	3	Purified Terephthalic Acid plant	PTA	70
	4	Dimethyl Formamide plant	DMF	4
	5	Phenol Synthesis plant	PHENOL	20
	6	Polpropylene	PP	30
	7	Polystyrene	PS	18/9
	8	Polycarbonate plant	PC	6
	9	Acetic Acid Plant	HAC	30
	10	Phenol Synthesis plant	ACETONE	12.3
Formosa Petrochemical Corp.	1	Naphtha Cracking Plants 1 and 2	Ethylene	135
	2	Utilities Supply Plant(area1)	Water, electricity, steam	350T/H x 5
	3	Utilities Supply Plant(area2)	Electricity	1950 T/H x 2
	4	Utilities Supply Plant(area3)	Water, electricity, steam	500T/H x 3
	5	Oil refinery Ethylene	Naphtha, gasoline, diesel	21,00(Crude oil)
Mailiao Power Corp.	1	Power station		600 MW x 5
Formosa Heavy Industries Corp.	1	Equipment for Machinery Shop	Equipment for refinery, petrochemical plants	3
Formosa Heavy Industries Corp.	2	Boiler Shop	Equipment for co-generation and utility power plants	350T/H 4ST
Formosa Komatsu Silicon Corp.	1	Wafer fabrication plant	8-inch wafers	2.4 million pcs
Formosa Asahi Spandex Co.	1	Spandex plant	SPANDEX	0.5

(10) No. 6 Cracker Project Phase 3 Investments
Phase three of the project, following and expanding on the achievements of phases one and two, includes a new plasma display plant, ethylene glycol plant, styrene momomer plant and 11 other factories. This work proceeds alongside expansion of the capacity of 18 phase one and two projects including the petrochemical and co-generation plants.