Oil refinery relocation could cost CPC NT$150 billion

Taipei, Feb. 11, 2003 (CENS)--It would be fairly difficult to relocate the refinery of Chinese Petroleum Corp.'s (CPC) crude oil refinery in Taoyuan, northern Taiwan, as promised by officials of the Ministry of Economic Affairs, according to CPC executives.

The executives are also concerned with other negative impact. They said that the state-owned CPC has poured NT$200 billion investment capital to build 18 plants and oil tanks storing two million kiloliters of oil since construction work started in 1976. The company has been proceeding with new investment projects by injecting some NT$4 billion (US$115.6 million) to modernize and maintain the equipment and facilities.

The refinery is one of the most important installations for the refinement of fuel oil in northern Taiwan. The demand for oil products in the northern part of the island accounts for 45% of Taiwan's overall demand. It would be impossible to transport oil products refined in southern Taiwan to the north, where several international and military airports are located.

The refinery was originally built in a mountain area in Taoyuan. But more residents have started settling down around the petroleum complex. CPC executives said that the action of driving the refinery away is similar to the eviction of legitimate landlord by illegal residents.

In order to safeguard the image of the Cabinet from the forced signing of an agreement by the economics chief, Cabinet officials said they respect the action of Economics Minister Lin Yi-fu. They said that it is only a matter of time to relocate the refinery as the environmental protection awareness continues rising. But the officials also emphasized that Lin did not make any firm commitment concerning when to move the refinery.

CPC executives estimate that it will take at least eight years and NT$150 billion to complete the relocation plan. They also expressed concern that the relocation plan will affect CPC's ambitious plan to transform its petrochemical complex in Kaohsiung of southern Taiwan into a specialized high-tech petrochemical industrial zone. Some worry that the CPC-led investment project of building Taiwan's eighth naphtha cracking plant could also be affected by the relocation of the Taoyuan refinery.

But Minister Lin stressed that there should be no "domino effect" from his promise to relocate the refinery. Taoyuan County chief Chu Li-luen suggested that CPC move the refinery to coast industrial zone in the county to settle the issue. Chu said he will discuss on the proposal with CPC proposal and then submit the plan to Premier Yu Shyi-kun and President Chen Shui-bian in order to minimize the negative impact from the relocation plan.