EQUATE run cuts adds to Mid-East PE woes

08 February 2007 10:24  [Source: ICIS news]

By Prema Viswanathan

 

SINGAPORE (ICIS news)--EQUATE has reduced operating rates at its 800,000 tonnes/year ethane cracker and 600,000 tonnes/year high density polyethylene (HDPE/LLDPE) plant at Shuaiba, in Kuwait, due to disruptions in gas supply, sources close to the company said on Thursday.

 

Company officials were unavailable for comment.

 

"The cracker complex can resume normal production only when the gas supply situation eases," one source said. He said it was hard to say when this would happen, adding that EQUATE would not disclose the current operating rate of the plants.

 

The production shortfall has exacerbated the PE supply crunch in the Middle East, where customers were already scrambling for material due to a series of shutdowns. The sources said that no force majeure had been declared on EQUATE's PE supplies but allocations to customers have been cut.

 

One of the company's customers said that it was still waiting for PE cargoes which had been purchased last December and was originally scheduled to be delivered in mid-January.

 

"We have been told that the shipments will arrive any day now but they're already three weeks overdue," the customer said.

 

Supply of blow moulding grades of HDPE were especially hard to come by, suppliers and traders said. One trader said that even film grade HDPE was in short supply.

 

Availability of LLDPE was also restricted, although not as tight as that of HDPE, they said.

 

Supply of PE has been tight in recent weeks due to a spate of outages and maintenance shutdowns in the region.

 

Borouge's 600,000 tonne/year HDPE/LLDPE plant at Ruwais, Abu Dhabi, was shut on 31 January for a two-week maintenance turnaround.

 

Two HDPE lines in Saudi Arabia, one run by Yanpet and the other by Petrokemya, also experienced two-week long outages caused by technical problems, and restarted only this week, sources close to the companies said earlier this week.

 

One of Yanpet's three 200,000 tonne/year HDPE units at Yanbu went down on 22 January. Yanpet is a joint venture between Saudi Basic Industries Corp (SABIC) and ExxonMobil.

 

The same week, SABIC also shut its HDPE and LLDPE plants at Al-Jubail, operated by its wholly-owned afficilate Petrokemya Arabian Petrochemical Co. Each of the plants has a capacity of 450,000 tonnes/year.

 

The HDPE plant was restarted this week, a source close to the company said but could not confirm whether the LLDPE plant had also restarted.

 

Market sources however said that the LLDPE plant was still down.

By: Prema Viswanathan
+65 6780 4359

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