UpdateShell sets allocation on US ethylene at 90% - sources

01 December 2010 19:53  [Source: ICIS news]

Shell ethylene plant in Norco, Louisiana(adds updates throughout)

HOUSTON (ICIS)--Shell will restrict US ethylene deliveries to 90% in December following the shutdown of one of its Norco crackers in Louisiana, market sources said on Wednesday.

The company said the cracker was taken off line on 27 November because of a ruptured steam line.

The duration of the outage was not yet known, a Shell spokesperson said.

Shell has two crackers at the site with a combined ethylene capacity of 1.4m tonnes/year.

Market participants said the unit affected was the smaller cracker, GO-1, which has 558,000 tonnes/year of capacity.

One market source estimated the unit could be down for 4-6 weeks, depending on the extent of the damage.

Shell did not provide details except to say that more information would be available after an inspection of the unit is completed.

US ethylene prices remained steady on Wednesday despite news of the outage.

Ethylene financial swaps for December traded at 50.00 cents/lb ($1,102/tonne, €848/tonne), in line with December deals done at 50.00 and 51.00 cents/lb on Tuesday.

“It seems the market does not think it [the outage] is a big deal,” one market participant said.

A 10% reduction from just one supplier is relatively small, the source said, referring to the Shell restriction.

($1 = €0.77)

For more on ethylene visit ICIS chemical intelligence
For more on Shell’s plants, visit ICIS plants and projects
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By: William Lemos
+1 713 525 2653



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