Shipping woes loom over Louisiana chems as river hits flood stage

12 May 2011 23:05  [Source: ICIS news]

HOUSTON (ICIS)--Logistical problems are threatening US chemical plants along the swollen Mississippi river as water levels continue to rise, sources said on Thursday.

Already, the river along Baton Rouge, Louisiana, is at 43.1 feet (13.1m), placing it in a major flood stage, according to the National Weather Service.

During such a stage, shipping and industrial activities will be "significantly affected", the National Weather Service said. Unprotected low-lying areas will be flooded.

So far, the US Coast Guard has not increased the safety restrictions imposed on Monday, which required ships to contact a traffic control centre at Baton Rouge.

The river is expected to crest at Baton Rouge on 22 May at 47.5 feet, breaking the record set in 1927, the weather service said.

To relieve pressure on the river, the US Army Corps of Engineers opened the Bonnet Carre Spillway.

The Corps will open the Morganza Spillway once a trigger point is reached, which is 1.5m cubic feet/second (42,000 cubic metres/second) of water passing the Red River Landing, north of Baton Rouge, said Louisiana Governor Bobby Jindal.

That trigger point could be reached by Saturday.

The Mississippi flooding has already created delays in the hydrochloric acid (HCl) and caustic soda markets.

A barge source said the disruptions along the river were anticipated to last until mid-June.

Kirby, one of the largest barge operators in the US, already expects the flooding to lower its second-quarter results by more than 7 cents/share.

Because of the barge delays, producers and distributors are loading up more rail ars and trucks.

One HCl market participant in Geismar, Louisiana, said the flooding has not affected production, but that other producers were considering shutdowns because some of the plants’ loading docks on the river were not equipped to handle such high water levels.

Whether or not the Morganza Spillway is opened will be a crucial logistical decision, the source said.

“The next few days are key,” the source said. “Opening up the spillway will help everything between Baton Rouge and New Orleans, where there’s lots of chemical and oil production.”

The lower Mississippi is home to several chemical plants. Plaquemine, Louisiana, and Baton Rouge have plants for companies including Georgia Gulf, Dow Chemical, Shintech, ExxonMobil, Formosa Plastics and Lion Copolymer.

Several major US producers have caustic soda plants in the lower Mississippi river region:

Company	Capacity	Location in Louisiana
Dow Chemical	1m tonnes/year	Plaquemine
Shintech	580,000 tonnes/year	Plaquemine
Georgia Gulf	410,000 tonnes/year	Plaquemine
OxyChem	385,000 tonnes/year	Convent
Olin	245,000 tonnes/year	St Gabriel

 Additional reporting by Al Greenwood and Stefan Baumgarten

By: Ruth Liao
+1 713 525 2637

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