Corrected: US forces majeures spike on Ike

19 September 2008 00:40  [Source: ICIS news]

FMs rise on IkeCorrection: In the ICIS news story headlined “Update: US forces majeures spike on Ike” dated 18 September 2008, please read in the first paragraph … issued a sales allocation … instead of … declared force majeure … ExxonMobil did not return calls from ICIS news on Thursday but contacted ICIS news on Friday to say it had not declared force majeure but had communicated sales allocations. A corrected story follows.

(Adds details, updates throughout)

HOUSTON (ICIS news)--ExxonMobil has issued a sales allocation on polyethylene (PE), a buyer said on Thursday, adding to the mounting wave of such announcements in the wake of Hurricane Ike.

ExxonMobil was allocating sales at approximately 50% of average consumption over the past six months, the buyer said.

ExxonMobil warned its polypropylene (PP) customers of a possible sales allocation due to disruptions along the Texas Gulf coast caused by last week’s hurricane, sources said. The company did not return calls seeking confirmation.

A source told ICIS news that ExxonMobil had declared force majeure on polyethylene but the company did not return calls on Thursday seeking confirmation.

ExxonMobil contacted ICIS news on Friday to say that it had not declared force majeure but had “communicated allocations of certain products”.

ExxonMobil said its Baytown, Texas, site continued to make progress toward restarting and was generating its own power. That site hosts 701,000 tonnes/year of PP capacity according to ICIS plants and projects. The company continued to assess damage at its Beaumont facility, which includes 930,000 tonnes/year low density PE and linear low density PE capacity.

ExxonMobil did not provide details about its Mont Belvieu site in Texas, which has 1.03m tonnes/year PE capacity.

Sunoco’s polymers business declared force majeure at its LaPorte and Bayport, Texas, plants, effective until further notice, buyers said. The two sites host a total of 545,000 tonnes/year PP capacity, according to ICIS plants and projects. Sunoco did not return an inquiry by ICIS news.

Customers said polyolefins sales allocations or controls were also in place for LyondellBasell and other producers. LyondellBasell did not respond to an inquiry.

Shell declared force majeure on phenol and acetone at its Deer Park plant in Texas, a source close to the company said.

Acetone capacity at Shell’s Deer Park plant is 363,000 tonnes/year while phenol capacity is 590,000 tonnes/year.

Shell said it had also declared force majeure on ethylene, propylene, butadiene and other materials.

“Our business units are also currently in the process of working with third party suppliers and terminals to re-establish our usual sources of supply in a safe and environmentally sound manner,” Shell said in a statement.

“Both Shell facilities and our third party supply and terminal facilities have suffered various degrees of loss of electrical power from the public power and communications grids, unavailability of feedstocks, raw materials and services [eg steam, air, nitrogen, water, electricity, natural gas] facilities and utilities used to  make our products, the lack of adequate staff to safely resume operations, and the loss of the transportation systems used for the delivery of products,” Shell continued.

“Hurricane Ike’s impacts to the power grid and to the transportation system [including railroads, pipelines, truck and marine traffic] are not isolated to the immediate plant areas and in fact extend through parts of Texas and Louisiana,” Shell said.

Rohm and Haas declared force majeure (FM) on acrylate, methacrylate and specialty monomer products.

The Rohm and Haas products are made at its Deer Park and Bayport plants on the Texas Gulf coast, the company said. The measure applies to both internal and external customers.

Although the plants "fared reasonably well" through Hurricane Ike, they have been unable to restart due to "multiple disruptions among suppliers and distributors along the [Houston] ship channel]", Rohm and Haas said.

Minor repairs and clean-up at the plants were under way, the company said, but the sites could be brought on line without access to energy and raw materials.

Additional reporting by Larry Terry, Heather Doyle McGuire, Brian Ford and Al Greenwood

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By: David Barry
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