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Downstream Operations

Downstream Operations


Being responsible for stable domestic oil and gas supply

Importing & Refining

As Taiwan’s domestic production of crude oil yields only extremely low volumes, CPC needs to import virtually all of the crude it refines to supply its domestic market. To ensure stability, CPC works to both maximize procurement on long-term contracts and to diversify its sources of crude. Imports in 2019 amounted to 150 million barrels; of that total, 50.9% came from the Middle East, 39.8% from the USA, 7% from Azerbaijan and 2.3% from West Africa. Imports of low-sulfur crude are maintained at a set ratio of the total to enable compliance with Taiwan’s ever more stringent environmental protection standards.

To import crude oil, CPC has installed offshore mooring pontoons for unloading large oil tankers: at Shalun in Taoyuan in and at Dalinpu in Kaohsiung. The company has also built dedicated tanker loading/unloading berths in the ports of Kaohsiung, Taichung and ShenAo.

Quality and Performance improvement

CPC now operates two refineries in Taiwan — at Taoyuan and Dalin— with a combined daily refining capacity of 600 thousand barrels of crude. Under government policy for industry relocation, Kaohsiung Refinery, an integrated refining and petrochemical production complex with a daily refining capacity of 220 thousand barrels of crude as well as 500 thousand tons of ethylene annually, ceased operations in late 2015. Upon closure, its refining activity was transferred to the expanded Dalin refinery and its ethylene production to the then new Third Naphtha Cracker in the Linyuan Petrochemical Complex.

The Dalin Refinery became operationally independent from the Kaohsiung Refinery in 1996. After expansion, there are 4 offshore mooring buoys as well as large and small wharves for handling both imports and exports, holding the capacity of up to 400 thousand barrels of crude. The Taoyuan Refinery came on stream in 1976; after engineering modifications and the addition of the second topping unit, its daily refining capacity now amounts to 200 thousand barrels of crude. In 2019, the total of refined products was 9,057 thousand kiloliters of gasoline, 2,360 thousand kiloliters of aviation fuel, 6,924 thousand kiloliters of diesel, 1,510 thousand kiloliters of fuel oil, and 431 thousand metric tons of LPG.

Taiwan’s increasingly stringent standards of environmental protection are largely in response to the demands of its people out of concern for their quality of life. At the same time, they exhibit increasing demand for a diverse range of oil-derived products and CPC has moved to enhance the quality of those goods. Going further, the company has in recent years raised the production value of its products by building additional and more technologically-advanced refining facilities such as reforming units, isomerization units, a tert-Amyl methyl ether and gasoline/diesel desulfurization plant, an aviation fuel processing facility, together with n-alkane, alkylation and residual fluid catalytic cracking (RFCC) units. All of the foregoing evidences the company’s aim to provide Taiwan’s people with a continually-improving range of petroleum products while upgrading the efficiency of its production methods.

Increase in performance while cutting down pollution

CPC responds to the EPA’s call for certain reductions in the area of fuel quality in 2011: of the sulfur content of gasoline and diesel fuel to under 10ppmw, of the aromatic hydrocarbon content of gasoline and diesel fuel to 35vol% and of the alkene content of gasoline to 18 vol%, CPC had constructed a 30 thousand barrels per day gasoline pyrolysis and hydro-desulfurization unit at the Taoyuan Refinery by 2008, a 20 thousand barrels per day gasoline pyrolysis and hydro-desulfurization unit at the Dalin Refinery by 2009 and a 40 thousand barrels per day diesel hydro-desulfurization unit at the Dalin Refinery by 2010. Furthermore, an 18 thousand barrels per day gasoline pyrolysis and quality improvement unit was moved in 2011 from the Kaohsiung Refinery to the Dalin plant.

Since 2006, CPC began increasing its heavy oil conversion rate by enhancing construction of both an 80 thousand barrels per day RFCC unit at the Dalin Refinery. The RFCC unit at the Dalin Refinery began testing and volume production in 2013. In order to ensure an adequate supply of olefin as feedstock, CPC also built a 14 thousand barrels per day alkylation unit at the Dalin Refinery to further upgrade the quality of its gasoline; and that unit came on stream in the middle of 2013. In addition, to cope with the acid gas in the process and reduce pollution, it invested in the construction of a sulfur plant with a daily output of 250 tons and produced qualified sulfur products at the end of June 2014.

In addition, CPC carried out an expansion of the No. 3 Hydro-desulfurization Unit at the Dalin Refinery to increase its high-sulfur crude refining capacity which increases from 30 thousand to 40 thousand barrels per day, lower the cost of crude oil procurement and stabilize the quality of the RFCC-unit’s feedstock. The expanded unit began production in March 2017.

To cope with the consequences of the Kaohsiung Refinery closure, the Dalin plant’s capacity was expanded with the following: a 150 thousand barrels per day atmospheric crude oil distillation unit (CDU), a 50 thousand barrels per day light crude fractionating unit (CFU), a 40 thousand barrels per day diesel hydro desulfurization (DHDS) unit and a 30 thousand barrels per day kerosene hydro-desulfurization (HDS) unit. These units completed performance testing and began volume production in 2018, in so doing eliminating worries about a shortage of the raw materials needed for the future survival and development of Taiwan’s petrochemical industry. With the completion of that expansion project, the 100 thousand barrels per day No. 9 Topping Unit at the Dalin Refinery, which had been operation for some 40 years was shut down. The capacity of the Dalin Refinery was boosted from 300 thousand barrels per day to its present 400 thousand barrels per day, raising CPC’s overall daily crude oil refining capacity to 600 thousand barrels per day.

To improve the refining configuration of Dalin Refinery and to meet the more stringent standards of marine fuel oil for IMO 2020, CPC plans to construct a 30 thousand barrels per day vacuum distillation unit (VDU) and a 8 thousand barrels per day solvent deasphalting (SDA) unit at Dalin Refinery along with asphalt storage facilities, an asphalt blending system, revamping of No.9 diesel hydro-desulfurization unit, and associated equipment. CPC aims to increase its competitiveness in oversea and domestic market by these efforts.

Exports of refined products–primarily to South Korea, Indonesia, the Philippines, Pakistan, Singapore, the UAE, Papua New Guinea and Australia – have increased year by year until in 2019 they amounted to approximately 4.5 million kiloliters. This trend looks set to continue, with additional export markets being developed in the future as a means of the company drawing the maximum possible benefit from this valuable area of business.


CPC in Petrochemicals: The Essential Elements of Production

CPC’s petrochemical complex is in Linyuan, which is run by Petrochemical Business Division (PBD). There are two existing naphtha crackers in Linyuan- ethylene, propylene and butadiene are major products of these crackers. Besides this, we have additional propylene capacity from our refineries (RFCC), which are operating under our Refining Business Unit (RBU). Total ethylene capacity of this corporation is 1.07 million metric tons. Total propylene capacity is 1.194 million metric tons. As for butadiene, total capacity is 158 thousand metric tons (KTA). These are olefins. As for aromatics, we get them from BTX (benzene/toluene/xylene) extraction units and reforming units. Total benzene capacity is 274 KTA. Total toluene capacity is 321KTA and 507 KTA for mixed xylene.

CPC organizes and supports the circular economy to create a win-win situation

As a pioneer of the upstream petrochemical business in Taiwan, this corporation has endeavored itself in variety of upstream petrochemical investment to create economic progress in Taiwan. From 2005 years on, CPC has promoted replacement program for old No. 3 cracker in to new No. 3 cracker, with total capex NT$40 billion. This new No. 3 cracker commercialized in 2013, with ethylene capacity of 720 KTA, propylene 370 KTA and 100 KTA for butadiene. Not only Linyuan but also Ren Da Industrial Park has been benefited by this new cracker. In the future, CPC will keep going for new technology, low energy consumption and economies of scale for our crackers to keep competitiveness of our downstream players

In the face of the challenges posed by climate change and depletion of natural resources, CPC actively follows the government’s “Circular Economy” Policy by turning petrochemical by-products used as fuel or previously regarded as industrial waste into value-added products. CPC aims to create a win-win situation between economic development and environmental protection by adhering to the principles of sustainable operations – also an important element in its efforts to surmount the challenge of industrial transformation.

Marketing CPC Petroleum Products

CPC’s marketing of refined petroleum products in its domestic market is primarily focused on the transportation sector – specifically the gasoline, diesel, fuel oil and aviation fuel. In 2019, its sales of those products in Taiwan totaled 18.4 million kiloliters in volume and generated revenue of approximately NT$389.7 billion. Automotive gasoline accounted for the largest share at approximately 52.3%, followed by diesel at about 26.3%, fuel oil at about 11.7% and aviation fuel at around 9.7%.

Taiwan’s internal market of refined petroleum products is divided chiefly between CPC and the Formosa Plastics Group and competition between the two continues to grow increasingly intense. CPC has worked hard at leveraging the advantage of its marketing network, and to protect its market share, by consolidating its gas station network: of the 2,501 sites operating in Taiwan at the end of 2019, 614 were directly run by CPC, 1 were jointly run by CPC and other parties, and 1,374 were privately-owned by CPC franchisees, adding up to a total of 1,989 sites. Their sales as a part of the total market volume break down as gasoline 81.1%, diesel 79.3%, fuel oil 93.0% and aviation fuel 59.1%, with the overall market share being 78.4%.

Improving storage and transportation to meet the needs

CPC operates aviation fueling stations at all of Taiwan’s airports - Songshan, Taoyuan, Taichung, Hualien, Taitung, Kaohsiung, Penghu, and Kinmen. Around the coast, it has marine bunkering stations for international vessels at Keelung, Suao, Taichung, Kaohsiung, and Hualien ports.

As of end-2019, CPC operated 13 product distribution centers, located country-wide at Keelung, Shimen, Taichung, Taichung Harbor, Wangtian, Minxiong, Tainan, Fengde, Qiaotou, Suao, Hualien, Magong, Kinmen and Matsu. These depots supplied filling stations in their surrounding areas with a total of 19.5 million kiloliters of product over the course of the year. Three chemical analysis centers in Keelung, Taichung and Kaohsiung, plus six testing laboratories, were charged with testing products for quality control and altogether handled 36.7 thousand samples during the year. The transportation department has transported 12.4 million kiloliters of oil in 2019, and the mileage was 22.2 million kilometers.

Mobile payment, optimization of services

In the gas station operation, CPC is unquestionably the market leader by virtue of offering the consumer superior-quality services across the board that differentiates it from competitors. The company further leverages its service advantage by implementing total customer experience management: having created and maintained the hygiene of lavatories; vigorously promoting VIP membership cards; introducing new business lines and services in line with contemporary trends; and reinforcing customer relationship management. CPC has taken the lead in offering card-based self-service refueling as a means of lowering operating costs and working around the difficulty of recruiting filling station attendants; at the same time as it has promoted this combined-service business model featuring a diversity of offerings, the company has boosted non-operating income by strengthening cross-industry alliances.

Because of the popularity of mobile payments, CPC has introduced and promoted contactless payment (Near-field Communications, NFC) since June 2018. With a view to optimizing the program of Mobile payment, strengthening loyalty of VIP membership, integrating the payment tools and so on, CPC’s own payment tool, CPC Pay, was released on November 12, 2019, and it can be considered as the pioneer of exclusively designed for making payments at gas stations. “CPC Pay” combines diverse functions such as payment, VIP membership services, management, promotions and inquiry services related to vehicles, such as query of parking lot, gas station, fuel price and eTag toll fee. Users can grasp some information efficiently by “CPC Pay”, and the value of CPC and satisfaction of consumer could be improved.

The aforementioned combined-service business model for filling stations comprises the provision of car-washing, quick maintenance and repairs, on-site convenience stores and the sale of superior-quality automotive and consumer products. In a proactive response to the government’s policy for developing green energy applications, CPC is busy installing battery-charging and battery-switching stations for electric motorcycles and other EVs. 376 battery-charging and battery-switching stations have been installed and 216 stations are scheduled for completion in 2020. Sales of a range of CPC products through the gas station channel in 2019 included 1.46 million bottles of Kuo-Kuang brand intake-system cleaner for motorcycles, automobiles and diesel vehicles; 450 thousand bottles of See Clean Eco-Friendly Laundry Detergent; and a record 117 thousand mooncake gift boxes. Revenues from car-washing and quick-maintenance services also set new highs. Overall gross profit from these diverse operations exceeded NT$1.27 billion for the year, abundantly manifesting both the value of CPC-branded gas stations as a sales and marketing channel and the fact that their range of services meets with customer approval.

CPC set up the 0800-036-188 customer hotline in 2000 to generally enhance its customer service and in particular provide quicker handling of, and response to customers’ questions. The 1912 CPC service hotline came into use in 2011, and English service was added in 2020, expanding the company’s window for communication with the public.

Well-recognized green buildings

Within the global trend towards environmental protection, there is now an emphasis on constructing buildings in a way that serves the cause of sustainability. Variously termed ‘ecology buildings’ in Japan, ‘eco-buildings’ or ‘sustainable buildings’ in Europe and ‘green buildings’ in the USA and Taiwan, the aim is to build so as to protect ecological systems, encourage a mutually beneficial relationship between the structures and the environment, conserve energy and reduce both pollution and the overall environmental impact. These sustainable design and eco-protection principles align with CPC’s dedication to achieving sustainability in its operations and accordingly a program to green its gas stations began in 2013. As of December 2019, 57 sites have received ‘green building’ certification.

Natural Gas​: 

CPC’s promotes natural gas as the fuel of the future in keeping with Taiwan’s policy aim of energy diversification. It is based on its inherent advantages in terms of high thermal efficiency, low pollution profile and convenience for safe handling. A new era of clean energy for Taiwan was ushered in with the completion of the country’s first LNG receiving terminal in Kaohsiung’s Yongan District in 1990. To cope with growing demand, its capacity was later boosted to 4.5 million tons annually; and a second-phase expansion project was completed in December 1996. A third-phase expansion project to satisfy demand from independent power producers (IPP) as well as consumer and industrial end-users in northern Taiwan commenced in July 1996. In addition to terminal-area expansion, this involved laying a 36-inch diameter, 238 km long undersea pipeline from the Yongan plant to Tongxiao. Its completion in December 2002 expanded CPC’s annual LNG handling capacity to 7.44 million tons.

Building out Taiwan’s natural gas production, transmission and storage infrastructure

Taiwan’s aforementioned second LNG receiving terminal is is sited close to Taichung's harbor. Originally designed with an annual LNG handling capacity of 3.0 million tons, it became fully operational in 2009 with the primary purpose of supplying natural gas to Taiwan Power Company’s (Taipower) Datan Power Station as well as industrial firms and household users in central and northern Taiwan. The project entailed building three LNG storage tanks each of 160,000-kiloliter capacity; gasification and gas supply facilities; and a 135-kilometer, 36-inch sea/land long-distance gas transportation pipeline from Taichung Harbor through the Tongxiao distribution center to the Datan power plant. The currently-ongoing Taichung LNG Terminal Phase II Investment Project calls for the construction of three additional 160,000-kiloliter above-ground storage tanks plus another gasification facility at the terminal itself; a 26-inch, 21.8 km terrestrial gas pipeline between the terminal and the Wuxi Separation Station; and a further switching station linked to the existing 26-inch pipeline at the Wuxi site. Once completed (as scheduled) in late 2019, the project will boost the annual LNG handling capacity of the Taichung terminal to over 5.0 million tons and ensure a stable, dependable supply of natural gas during the winter’s often inclement monsoon period as well as – and partly because of - greater storage capacity in terms of the number of days’ supply of LNG on hand.

Further expansion of the Taichung LNG Terminal’s capacity is under way. Current central government policies for phasing out nuclear power plants and for reducing greenhouse gas emissions mandate a 50% share for natural gas in fueling Taiwan’s total electricity generation by 2025. To help reach this target, CPC will lease Wharves 11 and 12 and their associated facilities from the Port of Taichung to create the Taichung LNG Terminal’s second dedicated LNG-unloading wharf; and execution of its Phase III expansion module will add two 180,000-kiloliter above-ground storage tanks and their associated gasification plant. These projects are scheduled for completion in 2022 and 2026 respectively.

CPC has constructed an extensive natural gas transmission and distribution system on Taiwan’s western side. It comprises approximately 2,164 kilometers of terrestrial trunk pipeline, extending from Pingtung in the south to Keelung in the north; and which includes 8 supply centers, one transfer center and 47 distribution stations along its length. Current plans are centered on the goal of constructing interlocking ring-shaped networks to produce a figure-8 configuration; this will involve laying down a 238-kilometer undersea pipeline from the Yongan LNG Terminal (near Kaohsiung) to Tongxiao in Miaoli County and a 500-kilometer terrestrial pipeline onwards from Tongxiao to Taoyuan. In addition, after the 36-inch undersea gas pipeline from the Taichung LNG plant to the Datan power station has come on stream, it will be linked with terrestrial pipelines in central and northern Taiwan to form another circular formation – thus completing the planned island-wide, integrated figure-8 natural gas transmission network.

Active expansion and assuring secure gas supply

Complying the government policies for phasing out nuclear power plants and creating an environmental-friendly, low carbon environment, CPC plans to set up four gas-fired generating units in Datan Power Station. To generate abundant energy for Datan Power Station, commodity sectors in the north and other customers of the power station, CPC plans to set up the third LNG terminal in Kuantang Industrial Centre, comprising reception facilities which can hold up to 3 million metric tons of import quantum, two LNG storage tanks each of 160 thousand-kiloliter capacity; gasification and gas supply facilities to connect with the existing gas supply system.

CPC’s Third LNG Terminal project got under way in 2016 and is currently scheduled to come on stream in October 2022. At that point, with the three terminals-one in each of northern, central and southern Taiwan-supplying natural gas to users in their respective areas, there should be some reduction in the cost and risk of transmitting gas over long distances-in that figure-8 combined undersea and terrestrial gas pipeline network will enhance the safety and stability of gas supply through its transfer and backup functions. Completion of this third LNG receiving terminal project will enable CPC to construct and operate national level natural gas supply system that is fully-functional, stable and safe.

Global arrangement, stabilization of gas supply

CPC has devoted considerable effort to diversifying its LNG sources to ensure a reliably stable supply of natural gas for Taiwan. The source of imports includes the Middle East, the Asia-Pacific region, Russia, Australia, North America, Central and South America, Africa and Europe. The procurement comes from all over the world.

In addition to long-term LNG procurement contracts, CPC acquires yet more supplies through medium/short-term/spot transactions to achieve the goal of stable supply and decentralized gas supply. In 2019, CPC imported most of its LNG from Malaysia, Qatar, Papua New Guinea and Australia, with some coming from Russia.


Liquefied petroleum gas-make use of great quality and achieve excellence

CPC’s long-standing monopoly in the LPG market was broken when the government opened it up to competition in 1999. Formosa Petrochemical Corp. and independent traders began importing their own supplies. With household gas, CPC’s LPG Business Division has been able to maintain its leading market share by making full use of its quality advantages, north-south transport, storage systems, comprehensive marketing, and retail network. In selling industrial gas, the company aims at lifting the quality of its customer service so as to both retain existing customers and win new ones. CPC has to balance compliance with the government’s LPG safety reserve policy against optimizing the rate of turnover in its storage tanks, which is crucial to profitability; at the same time, it must endeavor to reinforce both occupational safety and environmental protection protocols. Therefore, CPC can achieve the task of stabilizing the LPG supply in the domestic market and create operating performance.

CPC LUBRICANTS: internationally recognized, honorable brand

CPC is the leader in Taiwan’s lubricants market with its dual brand- ‘CPC’ and ‘Mirage’ that appeal to both consumers and professional users in domestic and oversea markets, supported by strong, well-defined and diversified sales channels. Those include more than 30 contracted distributors, the 600-plus gas stations directly operated by CPC and many retail chain stores. CPC’s Lubricants Business Division (LBD), founded in 1999, March 16, and is committed to providing quality products, premium services and full technical support to meet the needs of both its community and corporate customers.

Since 2011, The LBD operates an automated precision blending system, unique in Taiwan, for its products. Located in Chiayi, its construction was completed in 2016, taking five years. This plant has sharply lifted the level of efficiency and accuracy in lubricants production, which runs at an annual output of up to 90 thousand kiloliters. After the installation of lubricating grease production machinery with an annual output of more than 3,300 tons as part of a renovation project, CPC’s lubricant production equipment and technology is second to none, not only in Taiwan but also in the wider Asia-Pacific region.

In addition, CPC has set up a highly efficient logistics network, based on four warehouses for finished products respectively located in northern, central and southern Taiwan, which works as a distinct competitive advantage in making sales. In current developments, as of early 2018 CPC embarked on the two-phase construction of bonded storage and blending facilities for base oils and additives at a site within Taichung Port to both strengthen its supply capacity and to enable international trading in lubricant materials and customized products. In addition to cultivating its domestic market, the LBD is also vigorously expanding in the Asia-Pacific region. Distributorships, direct customer shipments and agencies are currently operational in China, Philippines, Indonesia, Vietnam, Myanmar, Cambodia, India and other locations. To circumvent the ASEAN tariff barrier to non-members, CPC is recently formed Maxihub Corporation joint-venture located in Vietnam’s Tong-Nai province. Formed by CPC along with Taiwanese and local firms with specialist know-how, this company will operate a lubricant blending, storage, packaging and logistics complex. Production is projected to begin in the end of 2021. In the future, CPC will use the Maxihub Co. as its second production base and move toward the operational model of diversified international trade in oil-derived products as a means of expanding its presence in overseas markets.

With the gradual rise of electric vehicles and lubricants market shrinks, marine engine oil becomes an important development for the future of LBD. In the past few years, the certification team has overcome difficulties and experienced complex testing processes and has kept making the significant history of LBD. With-indomitable perseverance and continuous efforts of teamwork, many major international certifications have been obtained, including MAN ES, WinGD, YANMAR, Daihatsu, Mitsubishi, KEMEL, and Wartsila etc. Aforesaid breakthroughs have been the model and innovation indicators for CPC.

In addition, LBD has also been committed to the establishment of a brand image in recent years. In 2019, CPC’s lubricant product not only awarded the 16th National Brand YuShan Award for Best Product, but also won the "Reputable Brand" gold award of lubricant category by Reader's Digest. It shows that LBD’s trustworthy brand image is affirmed by the general public.

LBD will continue to leverage its core competencies in manufacturing and marketing lubricants – skills such as R&D, formulation and blending, logistics, quality control and technical support services – while focusing on developing innovative and premium-level products, exquisite service, and technical consultancy to enhance customer satisfaction. Looking to the future, the LBD’s vision encompasses maintaining its lead over the competition in the domestic market and make the lubricant brands-CPC and Mirage, become well-known worldwide.