Libya protests disrupt chemicals operations, unsettle markets

21 February 2011 17:46  [Source: ICIS news]

LONDON (ICIS)--Chemicals operations in Libya have been disrupted and the price of oil has risen as anti-government unrest in the country intensified on Monday.

Tens of thousands of people have held protests in the streets of the Libyan capital Tripoli as well as in the country's second-largest city, Benghazi, in their efforts to force Col Muammar Gaddafi to step down from power and reform Libya's government.

There have been reports of violent clashes between protesters and supporters of Gaddafi.

The ongoing unrest in Libya, which is an OPEC member, heightened concerns over the security of global oil supply and pushed Brent oil prices to a two-and-a-half year high at above $105/bbl.

At 15:20 GMT, April Brent was trading at $104.88/bbl, up $2.36/bbl, while the March WTI contract, was trading at $89.84/bbl, up $3.64/bbl.

A softer US dollar and short covering ahead of the expiry of the March NYMEX WTI contract on 22 February added further upward pressure on prices. The US market is closed on Monday for the President’s Day holiday, although electronic oil trading continues.

The political unrest in Libya has forced a number of chemical plants in the country to shut down and stop operations altogether.

The 300,000 tonne/year NOC/Rasco cracker at Ras Lanuf, in Libya was thought to have been taken down over the weekend 19-20 February for safety reasons, linked to the political and civil unrest in the country, according to distribution and trading sources on Monday.

Methanol production at the Ras Lanuf site was also believed to have been stopped on 21 February for the same reasons.

NOC/Rasco, however, was unavailable to comment on this.

One distributor said it was waiting on news of a vessel, containing 2,000 tonnes of propylene, which was due to leave Libya on Monday evening. However, confirmation of discharge was not available.

The same source said it was unclear if an ethylene shipment, due to leave Libya on 23 February, would be discharged, depending on stock levels and the state of the country.

BP's head of strategy and policy, Ian Smale, who was speaking on Monday at the International Petroleum Week conference in London, said: “Our onshore operations in Libya are suspended until we evaluate what is going on.”

Libyan Norwegian Fertiliser Co (Lifeco) has also shut down production at its urea unit at Marsa El Brega as a precautionary measure, a spokesman with Lifeco stakeholder Yara said.

Norway-based fertilizer major Yara, which has a 50% stake in Lifeco as part of a joint venture established in February 2009, said it had not yet decided when production would restart.

In addition, Italian energy major Eni announced that it was preparing to pull its non-essential staff and their families out of Libya. The company added that there were no problems at its plants and operational facilities.

“The company’s production continues as normal with no effects on operation. However, Eni is further reinforcing the security measures for its people and plants,” it said in a statement.

Additional reporting by Giovanni Coiro, Heidi Finch, Carl Roache, Nurluqman Suratman and James Dennis

To discuss issues facing the chemical industry visit ICIS connect

By: Franco Capaldo
+44 (0)20 8652 3214

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly