30 August 2012 23:22 [Source: ICIS news]
By Al Greenwood
HOUSTON (ICIS)--Louisiana's chemical plants were beginning restart operations in the wake of Hurricane Isaac, but further progress will depend on the amount of flood damage as well as how quickly power and supply logistics can be restored.
Several chemical plants and refineries have either reduced operating rates or shut down in preparation of Isaac, which made landfall on Tuesday as a hurricane and drenched Louisiana with rain and flooding.
Isaac has since weakened to a tropical depression, with maximum sustained wind speeds of 35 miles/hour (55km/hour), according to the National Hurricane Center.
Isaac was about 35 miles west northwest of Monroe, Louisiana, moving north northwest at 12 miles/hour, the centre said.
Isaac had flooded several parts of Louisiana, and much of the state is without power.
As of 8:30 hours New Orleans time, nearly 763,000 customers were without electricity in Louisiana and neighbouring Mississippi, said Entergy, the region's main power company.
Entergy had more than 10,000 workers who were restoring power, the company said.
"If a plant has power and flooding hasn't damaged anything major, most plants can start up fairly quickly," said Luann Farrell, senior consultant at Nexant.
Some plants could restart in 24-48 hours as long as they have power and suffered no significant damage, she said.
By Friday, Lion Copolymer plans to begin restart procedures at its Baton Rouge and Geismar plants in Louisiana.
Likewise, Cornerstone Chemical could begin its restart process on Friday at its Fortier Manufacturing Complex, which is just outside of New Orleans.
Participants in an industry teleconference conference indicated that overall damage was relatively minimal.
Americas Styrenics’ St James styrene plant incurred some minor damage but had electric power, a plant official said during a conference call hosted by the Louisiana Chemical Association (LCA).
The 950,000 tonne/year plant had shut down in advance of the storm.
The plant official said shift workers were scheduled to return on Thursday night, but start-up plans depended on gas availability.
An Air Products official said its plants were in “relatively good shape – they all have power”.
He said Air Products workers would return to the plants on Friday and operations would begin ramping up.
On the other hand, Phillips 66's 247,000 bbl/day Alliance Refinery in Belle Chasse, Louisiana, had lost power and had flooding, the company said. Workers are now pumping water out of the refinery's flooded areas.
A Chevron facility at Belle Chasse was running out of nitrogen supplies, an official said during the LCA conference call. The back-up of salt water on the Mississippi river as a result of the storm was another issue.
Chevron Oronite operates a plant at Belle Chasse. The Chevron subsidiary makes additives for lubricating oils and fuels.
For many plants, Nexant's Farrell said flooded roads could prevent plant employees from showing up to work, delaying restarts.
In fact, several roads remain closed because of the storm, according to the Louisiana Department of Transportation and Development.
With so many factors, the speed under which producers can restart operations will vary plant by plant, Farrell said.
Ultimately, Isaac's effect on chemical markets will depend on how quickly companies can resume production.
The shutdowns could affect spot prices if material is not available, she said.
Plus, products that are already under price pressure could get a further boost from the shutdowns, Farrell said. On the hand, soft markets could see little effect.
Although Isaac caused several shutdowns, the storm still paled behind the disruption caused by past hurricanes such as Katrina, she said. Plus, producers likely learned lessons from those storms, which could help companies restart plants.
Additional reporting by Wesley Busch, Brian Ford and Frank Zaworski
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