US refinery closure may leave Braskem PP plant in feedstock lurch

05 December 2011 23:41  [Source: ICIS news]

US refinery closure may leave Braskem PP plant in feedstock lurchHOUSTON (ICIS)--US polypropylene (PP) producer Braskem America is looking at various options now that the feedstock supply for its Marcus Hook, Pennsylvania, plant has been jeopardised, the company said on Monday.

A 1 December announcement by Sunoco that it will immediately shut down the main processing units at its Marcus Hook refinery, more than seven months ahead of schedule, has created a "significant challenge" for Braskem, according to PP market participants.

Sunoco, which sold the Marcus Hook PP plant to Braskem in April 2010, provided it with a significant percentage of the propylene it needs to make PP at the Marcus Hook facility, sources said.

A Braskem spokesman declined to respond to specific questions about the situation, but said the company "is going to pursue both short- and long-term options to continue to operate our Marcus Hook polypropylene plant, including the use of all legal actions and remedies available".

Sunoco spokesman Joe McGinn declined to comment beyond saying that Sunoco is "working closely with Braskem on the situation".

Braskem, which in October completed the purchase of two PP plants in Texas at Freeport and Seadrift from US-based Dow Chemical, has a total US PP capacity of 1.4m tonnes/year, making it the nation's largest PP producer.

The company said would use its "global asset base, including the assets recently acquired from Dow" to minimise the impact of Sunoco's actions on its customers.

In an August interview with ICIS, Braskem America CEO Luiz de Mendonca said the company is seeking other sources of propylene in the US, adding that by becoming the largest user of merchant propylene in the US, the company will have a lot of leverage.

But in the short term, Robert Bauman, president of Polymer Consulting International, said there is not a lot of spare propylene to be found in that region of the US, adding that there are no pipelines that can easily transport the feedstock to the Braskem plant.

"The only way you can deliver it is … by rail," Bauman said.

Braskem's PP plant in Marcus Hook has a capacity of 345,000 tonnes/year, according to ICIS plants and projects.

If the company is unable to obtain enough propylene to continue operating the facility, it could quickly drive PP prices up, Bauman said.

It takes about 1.01 tonnes of propylene to produce 1 tonne of PP.

For more on propylene and PP visit ICIS chemical intelligence
For more on Braskem's plants visit
ICIS plants and projects


By: Michelle Klump
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