C3 pipeline outage restricts supply from Dormagen, Germany

11 February 2011 15:04  [Source: ICIS news]

LONDON (ICIS)--A pipeline carrying chemical grade propylene from Dormagen to consumers in Marl, Germany, has been closed since 9 February for maintenance, market sources said on Friday.

"The process of decommissioning the pipeline to carry out technical measures started on Wednesday," a source close to the situation said, adding that normal operations were expected to resume by 28 February.

While the outage had restricted propylene supply, it had not affected operations at INEOS’s two crackers in Dormagen, according to an INEOS spokesman.

“I can confirm that there is an issue with a third party pipeline which has restricted some supply. Our crackers are not affected,” the spokesman said in an emailed response.

Reports that a force majeure (FM) declaration had been made by INEOS on 10 February were not confirmed.

INEOS's two crackers in Dormagen, north of Cologne, have a total nameplate capacity of just more than 1.1m tonnes/year of ethylene, according to ICIS data.

Propylene traders said that they had noticed increased activity with regard to barge and rail tank car trade as a result of the pipeline outage.

One consumer affected by the interruption in supply said that it had been able to shift some deliveries into rail tank cars, and had been able to make swap arrangements.

“Right now, I am quite positive that the gap can be filled,” the consumer said.

Propylene spot prices were firm, but reasonably stable at the February contract value of €1,105/tonne ($1,493/tonne) and above with barge deals reported this week at €1,105/tonne and €1,120/tonne FOB (free on board) Antwerp.

($1 = €0.74)

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By: Nel Weddle
+44 20 8652 3214

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