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Taiwanese oil, gas and petrochemicals

Hydrocarbon Engineering,


Oil and gas

BMI has commented that the Taiwanese economy is heavily reliant upon oil and natural gas exports, particularly from the Middle East. BMI has also said that the country held its own during the 2008/9 financial crisis and its export based economy will invariably need a variety of sources of energy in the years to come. The oil price drop of last year has allowed Taiwan to both capitalise on more imports, but also diversify the origins. In the years to come, the future of LNG, the capacity of Russian gas exports to penetrate the East, and the opening up of Iran for more trade, according to BMI, will have significant impact on Taiwan’s natural gas consumption.

BMI has pointed out that similarly to Japan and Australia, the scaling back of Taiwan’s refined oil production primarily due to the closure of the Kaohsiung refinery this year, will add pressure to existing refineries to compensate the decrease in production. However, BMI has said that there is also an opportunity to begin revamping older, and much needed refineries to boost the overspill utilisation rate of refining in the country. Its main market for refined exports is Asia, though East Africa and the Middle East are potential growing markets for refined oil from the country. Qatar is to remain an important source of LNG, though Papua New Guinea and the US could be increasingly important suppliers of LNG to Taiwan.

Petrochemicals

According to BMI, Taiwan’s petrochemicals industry depends on its ability to compete within the Asian market. BMI has stated that the island could find itself crowded out as a result of rising Chinese self sufficiency and growth in low cost shale based ethane fed production in the US. Last year, BMI reports that Taiwan saw the beginning of a recovery in petrochemicals in line with overall manufacturing growth. Among the strongest end use markets was the automotive industry, which helped offset lacklustre performance in other segments. Nevertheless, the country has a small domestic market, relatively high labour costs compared with its neighbours, a strong environmentalist lobby and a large volume of FDI.

BMI has said that producers on the island will need to improve external competitiveness if they are to boost output. This will however depend on securing a reduction in tariffs on petrochemical exports to China to boost the competitive edge in the huge mainland market.


Edited from report briefs by Claira Lloyd

Read the article online at: https://www.hydrocarbonengineering.com/refining/06022015/oil-gas-petchem-taiwan-bmi/


 

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