Enterprise Texas fire is burning out as supply concerns mount

09 February 2011 17:23  [Source: ICIS news]

Enterprise Mont Belvieu facility following Tuesday fire, photo courtesy of Baytown SunHOUSTON (ICIS)--The fire at the Enterprise Products west storage facility in Mont Belvieu, Texas, is burning itself out, sources said on Wednesday, with the market shifting its focus to potential supply shortages and rising feedstock costs.

Market sources said the flames early on Wednesday were minimal compared with Tuesday, although the company did not immediately confirm whether the fire was completely out.

An Enterprise spokesman said pipelines near the fire were not near capacity, so the fire would not burn as long as it would if they were full, according to news reports.

Enterprise said it would not be able to fully assess the damage until after the fire was extinguished, but noted that its main facilities at Mont Belvieu were not damaged and remained operational, including its natural gas liquids (NGL) fractionators, propylene fractionators, butane isomerisation units and octane enhancement facility.

Enterprise’s north and east facilities as well as its import and export terminals on the Houston Ship Channel were also operational, the company said.

US ethylene bids and offers spiked following the fire, which was also causing some crackers to run at reduced rates because of constraints on ethane supply, market participants said.

The ethylene bid-offer range was at 45.50-48.00 cents/lb on Wednesday morning, sources said, up from 44.00-45.50 cents/lb prior to the fire.

The spike resulted from higher ethane prices, market sources said. A deal for ethane was done on Wednesday morning at 62.625 cents/gal, up roughly 8% from a range of 57.500-58.500 cents/gal on Tuesday.

Prices for butane and propane also rose on Wednesday, market sources said.

LyondellBasell said it reduced rates at its nearby cracker in La Porte. A source with knowledge of company operations said on Wednesday that its two Channelview crackers had not been impacted.

Also on Wednesday, a market source familiar with Huntsman operations said that company’s Port Neches chemical complex had not been affected.

The source said Huntsman typically receives about 17,000 bbl/day of isobutane from Enterprise’s isomerisation unit in Mont Belvieu for methyl tertiary butyl ether (MTBE) production, and that there was no impact thus far on operations.

ExxonMobil said on Tuesday that it had taken precautionary steps to keep its giant Baytown chemical plant and refinery complex operational, adding that it was still meeting customer commitments.

Meanwhile, Chevron Phillips Chemical, which operates an olefins facility nearby in Cedar Bayou and a polyolefins facility in Pasadena, Texas, would offer no comments regarding any potential impact from the Mont Belvieu blast.

Shell said the fire had no impact on its downstream operations or those of Motiva, but was still assessing the situation.

Enterprise's complex in Mont Belvieu is among the world's largest underground storage centres for natural gas liquids (NGLs). Crackers in the US rely on ethane as feedstock for ethylene.

The Enterprise facilities provide storage services for mixed natural gas liquids, ethane, propane, butanes, natural gasoline and olefins, the company said.

Enterprise Products also operates an NGL fractionation plant in Mont Belvieu. Overall, the NGL fractionation plant has a total capacity of 305,000 bbl/day, the company said on its website.

The fire in Mont Belvieu, located about 30 miles (48 km) east of Houston, began at about 12:30 hours Houston time (18:30 GMT) on Tuesday.

(Additional reporting by Sheena Martin, William Lemos, Brian Ford and Al Greenwood)

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By: Ben DuBose
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