SINGAPORE: Taiwan's Formosa Petrochemical Corp is maintaining reduced run rates at a secondary unit after technical issues, but could shut the unit in the fourth quarter if the problem persists, a company spokesman said on Tuesday.
The company is running one of its two 84,000 barrels-per-day (bpd) residual fluid catalytic crackers (RFCC), which produces transport fuels diesel and gasoline, at 75 to 80 percent of its capacity after running into mechanical problems, the spokesman said.
"We have not been able to run it at full capacity but will maintain this rate and try to figure out if we can resolve the mechanical problems," he said.
"If the issue cannot be resolved, we might take it down during the fourth quarter when the market is not so tight."
A second 84,000 bpd RFCC which was earlier shut for an extended period of more than three months, is back online and is operating at 85 to 90 percent of its capacity, the spokesman said.
Formosa may defer the loading of at least two gasoil cargoes for August, trade sources said. The company spokesman did not confirm this.
It might not offer any gasoil cargoes in the spot market for September, one of the sources said.
For gasoline, traders said Formosa may defer two cargoes of medium-range vessel size to September from August, one of which could be a spot cargo that it had recently sold. The spokesman also did not confirm this.
Formosa had not sold any spot cargoes for March to July due to a prolonged shutdown of one of its RFCCs that underwent a major overhaul from March to around July 10.
Other oil products are not affected by the lower run rates of the RFCC, an industry source said.
Despite the possible delays to gasoline and gasoil, traders said the impact on the gasoline market was marginal as Indonesia has mostly secured cargoes it needed to meet its fasting-month demand.
Refinery outages in India and Malaysia were also resolved.
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