LCY halts blast-hit operation, rebuffs Kraton claim

Jane Ho, ERJ China correspondent

Kaohsiung, Taiwan - LCY Chemical suspended the operation of its Dashe plant in Kaohsiung, on 8 Aug, to inspect its petrochemical feedstock transportation facilities. The move followed an order that day from local authorities, due to gas-explosions on 31 July.

The explosions happened at a pipeline transmitting imported propylene* from China General Terminal & Distribution Corp., a Taiwanese provider of petrochemical feedstock warehousing and transportation services, to LCY.

Both companies are under investigation to determine accountability.  More than 5,000 employees are impacted by the halted operation, said an LCY announcement. 

According to Wei Zhengcheng, spokesman of LCY, the Dashe plant has a 400 kilotonnes-per-annum polypropylene capacity, and the halted operation causes NT$50 million (€1.3 million) worth of damage each day.

"We are actively complying with government procedures and hope to resume operation as soon as possible," said Wei.

Wei also believes that regarding the termination of the Kraton-LCY deal (see ERJ report), the accident does not exempt Kraton from the $25 million break-up fee. "We all need to stick to the terms of the agreement," he said.

*Wei said CGTD is only providing transportation services, and wouldn't specify suppliers saying 'it was irrelevant'.