Market sources informed SSESSMENTS.COM that a fire occurred at a residual desulphurisation (RDS) unit in Formosa Petrochemical’s 540,000 bpd Mailiao refinery complex in Taiwan. The fire happened at the 80,500 bpd RDS No.2 unit at around 9:00 AM local time on July 15. The affected RDS unit is now shut. It was under planned maintenance in March-April, but the work was extended for ten days due to unexpected issues.
An RDS unit is typically used to reduce the sulfur content of residue by adding hydrogen in the presence of a catalyst. After going through this treatment, the low-sulfur residue can be used as a feedstock for a residual catalytic cracker (RFCC) unit to produce gasoline.
Formosa operates two RDS units in the Mailiao complex. It also plans to increase operating rates at its two 84,000 bpd RFCCs from 80% in June to 90% in July. However, it will be unlikely due to the latest accident. The Mailiao refinery is currently operating at 75%-80% of capacity, but market participants expected the rate to fall after the fire.
The impact on the producer’s downstream petrochemical production remains unclear, but output might be cut depending on the extent of the damage in the upstream unit. As SSESSMENTS.COM noted, Formosa’s chemical and fibres arm operates petrochemical units that can produce up to 1.2 million tons/year of benzene, 1.2 million tons/year of styrene monomer, and 400,000 tons/year of phenol. The company also produces up to 1.77 million tons/year of PX and 550,000 tons/year of PTA.
