Taiwan Today

Exploitation of one of 's main natural resources has been increasing rapidly to provide raw materials for the booming manufacture of a wide variety of petrochemical products

Miaoli is a pleasant small city three hours' drive south of . Nearby are the biggest natural gas deposits discovered in so far. Gas and some oil wells are to be seen throughout the roll­ing foothills of the area.

The requirement of natural gas in is expected to reach 8 million cubic meters per day in 1975. At the end of 1969, daily production of natural gas was about 4 million cubic meters. As of that time, gas reserves were estimated at 28.56 billion cubic meters, equivalent to 28.56 million kiloliters of crude oil. With a consumption rate of 5 million cubic meters per day, the reserve would last for only 15.5 years. Every effort is being made to increase reserves, but will have to depend on imported liquified natural gas in the near future.

Oil and gas exploration started late in the 19th century. More than 250 wells had been drilled before the end of World War II. More than 100 wells have been drilled and methods of exploration improved since 1945. The discovery of four new fields has encouraged drilling.

The province has two principal geosynclinal sedimentary basins separated by a geoanticlinal belt in the central range. These are the eastern basin and the western basin. The former is comprised of sev­eral major anticlinal folds. Its structural truncations and high induration of formations limit the prospect of petroleum resources. The latter runs from north to south along the foothills of the western plain and covers an area of about 17,000 square kilometers. Prospects are better than in the east.

Exploration since 1946 has included geological mapping and study, geophysical prospecting and interpretation, exploratory drilling and studies in regional geology, sedimentation and micropaleontology. The surveyed area covered 12,740 square kilometers. Seismic surveys began in the summer of 1955 and extended to 8,692 square kilometers. Gravity surveys of regional structures started in 1959. Studies in micropaleontology for dating geological formations collected 11,471 samples. Sedimentation for basin and petroleum migration environment studies of 10,140 square kilometers was carried out. Expenditures had reached US$9 million as of the end of 1969. One hundred and sixteen exploratory wells were drilled in 23 years. Total footage was 271,534 meters and the average depth was 2,359 meters. Exploratory drilling cost was US$25.7 million. Forty-seven devel­opment wells were completed with footage of 151,898 meters and on average of 3,250 meters. Total cost was US$16.8 million. The deepest well was of 5,500 meters.

Production of natural gas began in 1920. Prewar peak production of 114.2 million cubic meters was reached in 1939. From 1920 to 1945, about 1.04 billion cubic meters was produced. had 74 gas wells at the end of 1945. From 1946 to 1969, about 3.69 billion cubic meters was produced. The figure for 1969 was 919.5 million cubic meters from 6 fields in the north and the south.

The earliest drilling in the north dates to 1902 at the Chuhuangkang field. Of 108 wells, the deepest is of 3,561 meters. This field started producing oil and gas in 1903. As of the end of 1969, a total of 1.5 million barrels of oil and 161,636,422 cubic meters of gas had been produced. The 1969 output was 7,976,711 cubic meters of gas with a daily aver­age of 21,800 cubic meters.

The Chutung field started production in 1934 and now has 27 wells. Gas produced up to 1969 totaled 168,525,327 cubic meters. The highest daily produc­tion of 78,200 cubic meters was in 1940. Output was down to 1,230 cubic meters daily in 1969.

The Chinshui field started production in 1921. Its 74 wells had produced 2,966,711,380 cubic meters as of the end of 1969. Daily production is about 1.5 million cubic meters and the 1969 figure was 430,­576,000 cubic meters.

The Tiechenshan field was opened in 1963. Its 26 wells had produced 1,182,968,625 cubic meters by 1969. The figure for that year was 478,213,743 cubic meters. Average daily production has been 1,310,000 cubic meters but is now up to some 3.5 million cubic meters.

The Chingtsaohu field got its first well in 1966 and had 11 at the close of 1969, when daily production was estimated at 800,000 cubic meters.

Chiting was discovered in 1966. It has 2 wells and 1969 daily production was about 150,000 cubic meters.

The Niushan field in the south came into production in 1930. Its 27 wells had produced 209,958,220 cubic meters of gas by the end of 1969. Peak produc­tion of 54,700 cubic meters daily was in 1941. The 1969 average was 6,400 cubic meters daily.

Chutouchi goes back to 1940 and has 21 wells. Production had reached 44,733,200 cubic meters by the close of 1969. The peak was 19,400 cubic meters daily in 1958. Wells have been shut down due to the closing of the field's carbon black plant and lack of another market.

There are two natural gasoline plants in north­-central , one at Chinshui and the other at Tung­ hsiao. The Chinshui plant is equipped to process 1 to 1.2 million cubic meters of natural gas daily. Pro­duction capacity of the Tunghsiao plant is three times as large. Operating conditions of the two are generally the same. However, the cryogenic limit of absorp­tion is different. Tunghsiao recovers ethane; Chinshui does not.

The Tunghsiao natural gas plant provides a sophis­ticated system for processing 3 million cubic meters of gas daily from at 1,000 psig. and 90^oF. Liquid carried by the natural gas is separated and stabilized. The processing yields 257.37 X 10⁴ cubic meters of dry gas, 14.71 X 10⁴ cubic meters of ethane, 201.67 kiloliters of propane, 54.50 kiloliters of n-butane, 65.40 kiloliters of iso-butane and 174.41 kiloliters of natural gasoline daily. Natural gasoline is blended and marketed. Prom 1950 to the end of 1969, 222,930 kiloliters of automotive gasoline came from these plants. An ethylene plant will be completed in 1972 with capacity of 1,200,000 pounds annually.

Natural gas from these plants is channeled to five cities near the fields. The Chinese Petroleum Corpora­tion buys the gas but supplies some to city utility companies.

The installation of a 12-inch, 120-kilometer trunk line from fields at Miaoli to Nankang and an 8-inch, 16-kilometer pipe from Nankang to was completed in 1968. At a working pressure of 750 psig., these can deliver 5.3 million cubic meters of natural gas daily. Distribution lines, city gates and regulation stations are under construction. Sales will be undertaken by utility companies. It is expected that sales of city gas may reach 10 per cent of produc­tion by 1975.

To further serve cities and industries, another 12-inch pipeline is to be installed. This line will be 240 kilometers long, starting from Tunghsiao and extending through , Touliu, Chiayi and to . A 6-inch branch line will be built from to Pingtung.

Distribution lines are of 6 or 8-inch diameter. Only a few lines have 10-inch pipe for heavy indus­trial loads (see chart).

From 1950 to 1969, 1.99 billion cubic meters of gas was sold as industrial fuel. Of gas sold in 1969, 28.9 per cent was petrochemical feedstock, 34.6 per cent was industrial fuel, 33.9 per cent was for peak power generation and 3.1 per cent was for do­mestic fuel. The indigenous energy supply declined from 73.5 per cent of the total in 1964 to 45.6 per cent in 1969 and it is estimated that by 1975 it will be down to 40 per cent. Plans are underway to in­crease the supply of natural gas to replace liquid petroleum gas used for domestic fuel in the cities. The excess of liquid petroleum gas then will go to the villages or be used as petrochemical feedstocks.

Petrochemical production from domestic natural gas has increased nearly fivefold since 1961. The average annual growth rate has been about 25 per cent for the last 10 years. The first significant use of natural gas as a feedstock began in 1964 when the Chinese Petroleum Corporation and the Allied Chemical Corporation and Mobil Oil Company of the built a urea plant with capacity of 100,000 metric tons annually. In 1968, a government urea plant began operations with productive capacity of 90,000 metric tons a year plus 135,000 metric tons of ammonium sulphate. By the end of 1972, an ammonia plant will supply 600 tons a day for the expansion of nitrogenous fertilizer production and the raw material for acrylonitrile and caprolactam manufacturing.

Production of intermediates in 1968 included 204,070 metric tons of urea and 381,530 metric tons of ammonium sulphate. Production was nearly doubled in the 1965-1968 period of the Fourth Four­-Year Economic Development Plan. In the Fifth Four-Year Economic Development Plan (1969-1972), production of urea and ammonium sulphate will be boosted to about 300,000 and 500,000 metric tons, respectively. 's ammonium sulphate production in 1969 was not sufficient to meet demand. About 123,700 metric tons had to be imported. It is expected that after 1972, the supply and demand of ammonium sulphate can be balanced with increase of production and the shift from elementary to com­pound fertilizers. The supply of urea meets both local and export demands. Urea exports jumped from 73,000 metric tons in 1967 to 102,600 metric tons in 1969.

Manufacture of methanol using natural gas as raw material was started in 1966 with a plant produc­ing 50 tons daily. About 21,000 metric tons was produced in 1969, mainly as feedstock in making formaldehyde. A new methanol plant using the ICI low pressure process is located at Miaoli. It uses abundant CO₂ rich natural gas.

Ethane extracted from natural gas can be used for the production of ethylene. An ethane cracking plant was completed in 1971 to produce 50,000 metric tons of ethane per year. Ethylene is processed into polyethylene.

The China Petroleum Corporation completed a naphtha cracking plant in May of 1968 with capacity of 50,000 metric tons of ethylene annually. Most of the ethylene goes to a nearby polymer plant for annual production of 30,000 metric tons of polyethylene. Ethylene now supplied by CPC is only a beginning. Another naphtha cracking plant producing 200,000 metric tons of ethylene annually is planned. This ethylene will be used to make more polyethylene, ethylene dichloride and vinyl chloride monomer. The production of high density polyethylene is also under consideration. Other plans are for the manufacture of acetaldehyde and acetic acid.

An acrylonitrile plant using propylene from naphtha cracking and local ammonia will be completed this year. Plans are under consideration to use propylene for polypropylene and octyl alcohol. Butadiene will be extracted from the C₄ portion of naphtha cracking by-products after the completion of a second naphtha cracker.

Aromatics are another by-product of naphtha cracking. The first aromatic extraction plant will be producing 26,400 metric tons of dimethyl terephalate annually by 1972. Part of this DMT will be sold to in exchange for caprolactam. The DMT plant uses xylone from naphtha cracking.

These industrial intermediates may be further treated to make resin, rubber, plastics and synthetic fibers. 's only thermosetting resin produced in large quantity is urea-formaldehyde resin which yields glue for plywood. In 1969, about 35,000 metric tons of urea-formaldehyde and phenol-formaldehyde were produced. Even so, about 10,500 tons of polypropy­lene and 2,900 metric tons of methyl methacrylate resin were imported in 1969 for the manufacture of end products.

A project for manufacturing styrene-butadiene rubber has been discussed. Demand for synthetic rubber is about 12,000 metric tons annually.

Polyvinyl chloride (PVC) is the principal mate­rial of plastics. Annual per capita production is about 10 pounds, half that of but about the same as in the and . This is well over local demand and about half the output is ex­ported. Production of PVC was 63,775 metric tons in 1967, 68,063 metric tons in 1968 and 66,000 metric tons in 1969. PVC exports jumped from 29,100 metric tons in 1967 to 54,700 metric tons in 1969.

Polyethylene plastics rank second. About half of PE products are used for film and packaging. PE bottles and other containers are produced in large quantities. Considerable amounts of PE are used in making plastic flowers for export. Raw PE resin was imported until 1969, when local production started. The local demand for PE resin was 30,000 metric tons in 1968, a 30 per cent increase over 1967. Demand will reach 110,000 metric tons annually. High density PE occupies about 20 per cent of the total. More than half of PE production is contemplated for the manufacture of export products. About 19,300 metric tons of PE was exported in the form of film, plastic flowers, pipe, toys and wire.

Polystyrene demand in is about 8,000 metric tons a year. Manufacturers are producing gen­eral purpose polystyrene from imported styrene monomer. Production of copolymers has been started. About a third of the demand for copolymers is met by imports, mostly of high impact grade and expand­able PS for polystyrene foam.

Synthetic fiber production was started in a few years ago. Rapid growth of demand has neces­sitated sizable imports. It is expected that by 1973 will be self-sufficient in synthetics. Monomers for these will still be imported.

Due to high demand for intermediates, a plan has been drawn up for the supply of petrochemical materials. Self-sufficiency in the produc­tion of petrochemical intermediates and end products is expected by 1975.