Gas leak blast in Taiwan puts LCY Chemical in the limelight

Taiwanese petrochemical firm LCY Chemical Corp is in the news again. The recent headline was to do with explosions in Taiwan’s second largest city of Greater Kaohsiung, with preliminary investigations indicating that a gas leak from LCY’s pipeline may have caused explosions that killed around 28 and injured 300 people.

Meanwhile, the company claimed it had nothing to do with it. “The pipeline that caused the explosions has an 8-in diameter and does not belong to LCY Chemical. LCY Chemical’s closest pipeline has a 4-in diameter and is 10 m away from the explosion site,” company spokesperson Abby Pan told a press conference in Taipei recently.

However, Kaohsiung city officials pinned responsibility for the disaster on LCY, which uses gas piped under the city. A line channelling propene between China General Terminal& Distribution Corp. and the company’s facility showed a drop in pressure on 31 July, the city government said in a statement. LCY did not ask China General to stop delivery immediately nor did it report the readings to the environmental protection bureau, allowing a large amount of propene to leak for three hours, city officials said.

In response to this, the Deputy General Manager of LCY, Chiu Yuan-yuan, was quoted as having said that the pipeline was designed by state-run oil refiner China Petrochemical Development Corp (CPC), which is also responsible for performing regular checks on the pipeline.

A spokesman for CPC disputed Chiu’s remarks later. Chang Jui-tsung said that CPC does not have a maintenance contract for the pipelines used by LCY to transport propene. He added that the pipeline and the right to use it belonged to LCY.

The blast had an effect on Taiwan’s stock market, especially gas and chemical firms. Among those, Asia Polymer Corp, Taita Chemical and LCY were the hardest-hit.

This is not the first time there has been a fatal gas blast in Kaohsiung. In 1997, an explosion killed 14 locals and firefighters and injured 11 when a petrochemical company was undertaking a pipeline project.

LCY had also been in the news in July. US SBC maker Kraton Performance Polymers had announced that it had put its plans to merge with LCY on the backburner, since LCY’s SBC business had declined in the first quarter of 2014 and there is expected to be a related decline in its forecasted results thereafter (


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