TAIPEI – Taiwan’s Formosa Plastics is weighing the possibility of constructing a $7.2 billion refinery in Guatemala with the capacity to process 360,000 barrels per day of crude, company sources said Thursday.
The huge project could also include other investments, such as a power plant to supply the refinery with electricity, port facilities and warehouses, said the company source, who spoke on condition of anonymity.
Formosa Plastics founder Wang Yungching, the richest man in Taiwan, ordered an evaluation of the project after it was proposed to him during a June 22 breakfast with Guatemalan President Oscar Berger and Taiwanese President Chen Shui-bian.
Formosa Plastics plans to send a team to Guatemala to conduct a detailed study of the refinery project and will make a decision on whether to move ahead with the massive investment after reviewing the study’s conclusions, the company source said.
“The cost of refineries has skyrocketed in light of the demand created by China, Taiwan and the Middle East. That’s why it is important to find the right time,” a Formosa Plastics executive said, adding that it might be better to wait until costs come down if the project is not needed on an emergency basis.
During his visit here last month, Berger obtained tens of millions of dollars of aid for Guatemala, with Taiwan agreeing to donate $40 million for the repair and expansion of a highway and another $10 million for improvements to the Central American nation’s prison system.
The Asian country also promised to provide up to 25 new scholarships annually for Guatemalans interested in post-graduate studies at Taiwanese universities in fields such as business and engineering.
Guatemala renewed its backing for Taiwan’s efforts to join international organizations and commitment to bilateral ties based on “mutual assistance and the common defense of democracy and freedom.”
Taiwan has been trying to bolster relations with its allies since Costa Rica decided to cut ties with Taipei in June in favor of establishing diplomatic relations with Beijing (TT, June 8).
Half of the 24 nations that maintain diplomatic links with Taiwan are located in Latin America and the Caribbean. China and Taiwan split amid civil war in 1949 and Beijing refuses to have diplomatic ties with countries that recognize the Asian island, which it regards as a renegade province.