Focus'Force majeures' multiply in wake of Hurricane

27 September 2005 21:54 [Source: ICIS news]

Flooded tank farm at Beaumont, Texas By Patrick Crow

HOUSTON (ICIS news)--DuPont and Basell have declared force majeure on more chemical products as a result of Hurricane Rita disruptions.

On Tuesday, DuPont announced force majeure on ethylene copolymers. It said although its packing and industrial polymers plant at Orange, Texas was not damaged, the site lacked utilities, raw materials and supporting infrastructure.

Basell declared force majeure Monday for all polypropylene, propylene carbonate methacrylate (PCMA) and Catalloy process products made in North America, citing Hurricane Rita’s impact on two plants as well as the lingering effects of the earlier Hurricane Katrina.

It said its Lake Charles, Louisiana plant had minimal damage from Hurricane Rita but damage to Calcasieu Parish appears to have been significant and the plant does not have any utilities.

Basell said that a rail transportation embargo is still in effect and the plant’s employees "remain generally unavailable as they continue to recover from the storm’s effects on their families and homes.”

It said its Bayport, Texas plant also was undamaged but remains closed because of “similar, but less severe, utility, logistics and manpower issues."

Basell said it could not predict when either plant would resume operations. It said, "Customers will experience product shortages and delivery delays and Basell will be compelled to keep pricing and delivery dates open until our supply capabilities are re-established," it said.

Lyondell Chemical said its ethylene glycol plant at Beaumont would be idle for a month due to Hurricane Rita. It said three plants out of the storm’s path had been restarted: an ethylene unit at Corpus Christi, Texas and polyethylene units at Matagorda and Victoria, Texas.

Lyondell, which has 10 plants spread along the Texas Gulf Coast, lost 60% of its manufacturing capacity as a result of shutdowns in advance of Hurricane Rita, said Kevin DeNicola, senior vice president and chief financial officer. He told a Credit Suisse First Boston chemical conference that most of the plants were expected to be back on line within a few days.

Dow Chemical said it was ramping up production of propylene oxide (PO) and propylene glycols (PG) at its undamaged Freeport, Texas plant. Last week it restarted its PO/PG plant at Plaquemine, Louisiana, which had been shut for Hurricane Katrina.

“Even after PO/PG production is fully restored, we expect supply conditions to remain constrained for the near term due to disruptions caused by both hurricanes to transportation logistics in Louisiana and Texas,” said Antulio Borneo, commercial director for oxides and glycols.

Nova Chemicals placed polystyrene (PS) under order control as it assesses the availability of energy, styrene monomer, other raw materials and support logistics for its Bayport plant.

It said effective 1 November, it plans to increase the price of all extended polystyrene (EPS) grades by 5 cents/pound ($110 or Euro91/tonne) and modified/cup grades by 7 cents/pound in North America. It was not known if customers would accept the proposed price increase.

(With additional reporting by Stephen Burns in Houston)

Following is the status of chemical plants directly in the path of Hurricane Rita, as of Tuesday:

TEXAS

Company, location	Main products	Status
BASF, Port Arthur	Propylene, ethylene, benzene	Shut down, no major structural damage, no restart schedule
BASF, Beaumont	Various	Shut down, no major structural damage, no restart schedule
Chevron Phillips, Port Arthur	Ethylene, propylene, cyclohexane	Shut down; restricted access, power out, assessment ongoing
Chevron Phillips, Orange	HDPE	Shut down; restricted access, power out, assessment ongoing
DuPont, Beaumont		Shut down; structurally sound, environmental assessments under way
DuPont, Orange	Ethylene, propylene, LDPE	Shut down; structurally sound, environmental assessments under way
ExxonMobil, Beaumont	Ethylene, paraxylene, polyethylene, LDPE	Shut down; working to restore basic utilities
Goodyear, Beaumont	Styrene-butadiene rubber	Shut down; damage being assessed. Raw materials suppliers have also been impacted.
Huntsman, Port Neches	Ethylene, ethylene oxide, ethylene glycol	Shut down, no serious structural damage; restart dependant on restoration of outside utilities
Huntsman, Port Arthur	Various	Shut down, no serious structural damage; restart dependant on restoration of outside utilities
ISP Elastomers, Port Neches	Styrene-butadiene rubber (emulsion)	Force majeure declared, no restart expected before 10 October at the earliest
Lanxess, Orange	Ethylene, propylene, diene terpolymer, SBR	Shut down; some structural damage and flooding
Lyondell - PD Glycol, Beaumont	Ethylene glycol, ethylene oxide	Access restricted by flooding, but no significant damage; restart to take several weeks at minimum

LOUISIANA

Company, location	Main products	Status
Arch Chemicals, Lake Charles	Hydrazine hydrate	No information available
Basell Polyolefins, Lake Charles	Polypropylene	Shut down, force majeure declared; minimal damage but restricted access, no utilities
CertainTeed, Lake Charles	Polyvinyl chloride	No information available
Citgo, Lakes Charles	Benzene, MTBE, propylene	Shut down, assessment under way; partial restart of associated refinery on Monday
ConocoPhillips, Lake Charles	MTBE, sulphuric acid	Damage still being assessed; wind damage and power outage at associated refinery
Georgia Gulf, Lake Charles	Vinyl chloride, ethylene dichloride	No information available
Huntsman, Lake Charles	Various	Shut down, no serious structural damage; restart dependant on restoration of outside utilities
Louisiana Pigment, Lake Charles	Titanium dioxide	No information available
PHH Monomers, Lake Charles	Vinyl chloride, ethylene dichloride	No information available
PPG Industries, Lake Charles	Perchloroethylene, Trichloroethylene, Caustic soda, chlorine, ethylene dichloride	Shut down, force majeure declared. Water and debris clean up under way. Only temporary power available
Sasol, Lake Charles	Ethylene, Linear alkylbenzene, butanol	Shut down; no damage reported
Westlake, Lake Charles	Ethylene, LDPE, styrene	Minor physical damage; shut down, awaiting restoration of feedstock and utilities

By: Patrick Crow
+1 713 525 2653

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