Economy

Losses mount following naphtha plant fire

• Publication Date：07/26/2010
• Source： Economic Daily News

Financial losses resulting from a fire that broke out at Formosa Plastics Group’s sixth naphtha plant in Mailiao Township, Yunlin County July 25 are too difficult to assess at this point as the fire has yet to be brought under control, industry sources said.

The fire started at the hydrodesulphurization facilities of the plant’s No. 2 oil refinery shortly after 8 p.m., leading to a temporary shutdown of production.

The industry sources said that if the fire can be contained, losses ranging from between NT$20 million (US$62,200) and NT$30 million per day could be expected. However, if the fire leads to a complete shutdown of the refinery for an extended period, it could cost the company as much as NT$25 billion a month. In this scenario, indirect losses to downstream sources supplied by the plant would be even more difficult to assess, they added.

Lin Keh-yen, spokesman for Formosa Petrochemical Corp., a subsidiary of the FPG, said the fire is suspected to have started as a result of a heavy oil leak. He noted that as the fire has continued to spread, it is hard to determine the amount of damage at this point. However, he added that the scope of the fire has been brought under control and that it should be extinguished in a short period of time.

The company pointed out that the plant has three refineries that produce a total of about 540,000 barrels of petroleum a day. It said that an assessment of when the No. 2 refinery could resume production would have to wait until after the fire is put out.

The fire is the second to hit the plant in 20 days. Yunlin Magistrate Su Chih-fen strongly criticized the two industrial accidents, saying that, “We will definitely deal with the matter.”

Chen Shih-ching, head of the county’s Environmental Protection Bureau, stated the fire “clearly illustrates that there is a problem with industrial safety at the plant.” He added that the county government does not rule out the possibility of shutting down the plant’s operations completely.

The industry sources noted that the occurrence of the fire would also complicate matters regarding the carrying out of an environmental impact assessment for the plant’s planned fifth-stage expansion. (SB)