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Re ning technologies upgraded to enhance

quality and quantity

In response to Taiwan's increasingly demanding environmental

and quality of life standards, coupled with the need to produce

a wider range of petroleum products, CPC has in recent years

moved to both improve the quality of its products and enhance

their production value. Refining and production facilities

have had design and process upgrades to enable supplying

Taiwan's domestic market with higher-grade products, such

as desulfurized gasoline and diesel. At the same time, these

upgrades have raised the level of production efficiency across

the whole range of refining processes.

Additionally, CPC operates facilities enabling compliance

with the Environmental Protection Administration's 2011

directive stating the parameters for the sulfur and aromatics

content of gasoline and diesel fuel. These plants consist of a

30,000-barrel-per-day cracked gasoline hydrodesulfurization

plant at the Taoyuan Refinery, completed in 2008; a

20,000-barrel-per-day cracked gasoline hydrodesulfurization

plant at the Dalin Refinery, completed in 2009; and a similar

40,000-barrel-per-day plant for diesel at the Dalin Refinery,

completed in 2010. Additionally the 18,000-barrel-per-day

cracked gasoline quality improvement plant was moved from

the Kaohsiung Refinery to the Dalin Refinery in 2011.

Additional facilities at the Dalin Refinery include an

80,000-barrel-per-day residue fluid catalytic cracking (RFCC)

facility, which began mass production in 2013. At that same

location, construction of a 14,000-barrel-per-day alkylation

plant able to take advantage of the plentiful supply of crude

butane feedstock from the refinery's heavy fuel oil conversion

facility began in 2008; this plant, designed to boost gasoline

quality, began mass production in 2013. In order to eliminate

acidic process fumes and reduce emissions, CPC constructed

a new sulfur plant with a daily output of 250 tons that began

producing high-grade sulfur in mid-2014. To meet the increased

need for low-sulfur fuel oil feedstock following commissioning

of the heavy fuel oil conversion facility at Dalin, CPC is planning

to revamp the No.3 residue hydrodesulfurization (RDS) plant,

with investment slated for March 2017.

Due to the aforementioned closure of the Kaohsiung Refinery,

CPC is installing additional process plant at its Dalin site to

ensure an uninterrupted supply of raw materials to Taiwan's

petrochemical industry. Current plans call for the construction

of an ambient-pressure petroleum distillation facility with a

daily refining capacity of 150,000 barrels, a 50,000-barrel light

crude distillation facility, and hydrodesulfurization plants for

both diesel (40,000 barrels) and kerosene (30,000 barrels) - all

of which are expected to be completed by June 2017.

To boost the value of mixed C4 hydrocarbons produced by

the heavy fuel oil conversion plant used for manufacturing

high-value petrochemical products, CPC is involved in a

joint-venture to build and operate an 180,000-ton-per-year

isononanol (INA) plant and a 144,000-ton-per-year methyl

tert-butyl ether (MTBE) facility; the project is now in the

planning stage (until mid-2017) and production should start

in or by 2019.

While CPC is mainly focused on supplying its domestic market

for petroleum products, it does export any surplus: in 2015

approximately 2.798 million kiloliters of its major products went

to Vietnam, Singapore, Indonesia, Malaysia, the Philippines,

the UAE, and China. The company plans to further develop

export markets in order to boost profitability.

15

Downstream Operations