Volume 3, issue #22 - 14-09-1998

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Mobil wants to build LNG terminal for northern Taiwan

July 15, 1998 Mobil is hoping to build a LNG plant to feed new power plants near the power-starved Hsinchu science park.
"We are considering investing T$ 20 bn to build an LNG terminal and storage facility at Taoyuan," said Adward Chou, project general manager at the firm's Taipei office, Mobil LNG Far East.
Taoyuan county, northern Taiwan's industrial heart, is home to Taipei's international airport, the island's "Silicon Valley" at Hsinchu and the main northern crude ports operated by the state oil monopoly Chinese Petroleum Corp.
The terminal would have capacity to import 2 mm tonnes of LNG a year and deliver it to 5 power stations already under construction or planned for the vicinity, which is known for costly summer brownouts.
"The LNG terminal project's development depends closely on the planned power stations in the area," Chou said. "The progress of those power station will have direct impact on demand for LNG and LNG facilities."
State-owned Taiwan Power Co has plans for an LNG-fired power plant near Taoyuan, but has yet to acquire land. Taipower said the plant alone would burn 2 mm tonnes of LNG a year.
Ever Power IPP Co, a unit of Ever Fortune Industrial Corp, is building a T$ 19 bn gas-fired plant in Taoyuan county with an eye to supplying the Hsinchu science park.
Taiwan has 1 LNG port and storage facility, a state-owned one in southern Kaohsiung. A second has been proposed for a Taoyuan site by Tuntex Distinct group.
State approval is needed to construct Mobil's facility and the project must meet stringent environmental requirements set by the Environmental Protection Administration.
Chou said Mobil was actively studying the project's merits. "We will take a few months to complete a feasibility study for the economic ministry to review," Chou said.
Ministry officials said they were planning a multi-agency meeting to discuss the basic framework for Mobil's project, which would be built on a small tidewater island off the Taoyuan coast.
Chou said Mobildid not expect the project to face significant resistance from Taiwan's growing environmental movement, citing its distance from population centres.
"The project will not involve onshore land, so it will face less problem," he said.
Industry experts said Taiwan's surging energy demand made for a ready market for LNG newcomers like Mobil.
Taiwan's LNG demand is expected to hit 13 mm tonnes in 2010 and 16 mm in 2020, compared to less than 4 mm tonnes in 1997, energy commission officials said.
Taiwan has no restriction on private LNG imports, but to date only Chinese Petroleum has built facilities to import and distribute LNG.
Tuntex has plans to invest $ 3.2 bn to build an LNG terminal and storage at Taoyuan with capacity to import 6 mm tonnes of LNG per year, but has yet to obtain state approval.
CPC, which runs Taiwan's sole LNG terminal at southern Kaohsiung, plans to expand its 4.5 mm tpy LNG import capacity to 7.5 mm.