Floods put Cedar Bayou out for one month-plus

Source: ECN


THE FLOODS in Texas, US, have spread a trail of damage and destruction. Chevron's Cedar Bayou site was under flood water for several days and force majeure has been declared with all plants at the site down and unlikely to restart for several weeks.

Chevron's management was back on the Cedar Bayou site ten days ago to begin to assess the damage, although the area was still flooded.

Sources suggest it is still too early to give an accurate assessment of how long the various units at the site will be down but the major damage is said to be to electrical equipment and computer installations rather than to the hardware. A month is thought to be a very optimistic minimum outage for any units on the site.

Ethylene capacity at Cedar Bayou is around 655 000 tonne/year. Chevron management has taken the decision to go into a major maintenance outage on the cracker now that it has been forced down because the plant has been experiencing compressor problems over the past several months.

The next maintenance turnaround had been scheduled for April 1996. It is unclear whether the 450 000 tonne/year Port Arthur cracker will be able to support customer allocations as high as 70% of contractual supplies, which is said to be the current position. Because of the compressor problems Chevron had already been bringing in material from overseas to build inventory.

Chevron's only lldPE capacity is the 200 000 tonne/year swing plant at the Cedar Bayou site, with around 4-5% of US lldPE capacity, and here it appears customers will receive no allocation. However, the lldPE plant was said to be least damaged by the flood water.

Output has also been lost from the 280 000 tonne/year ldPE plant at the site but 136 000 tonne of alternative ldPE production exists at Orange, Texas, so customers will receive some material.

Chevron's management hopes to get the larger 180 000 tonne/year line of its 250 000 tonne/year alpha-olefins production at Cedar Bayou up and running before the end of November but warns that all estimates may be subject to change. Chevron was already working on a debottlenecking of the other line when the unit came down.

Chevron has 19% of the US alpha-olefins market. After the debottlenecking this will rise to around 23%. Its share of the merchant market is thought to be larger.

The company has alpha-olefins in inventory at Antwerp and in the Stolthaven facility on the Houston Ship Channel as well as some inventory at the Cedar Bayou site and is working out what sort of allocation is feasible.

For some major fractions, like butene, customers will probably receive no allocation from Chevron but for higher fractions arrangements have been made with other suppliers to allow full allocation of order quantities.

Amoco's 227 000 tonne/year PP unit at Cedar Bayou, while escaping the flooding, was served by utilities from the Chevron site and therefore is also likely to be out for at least another week. However, the unit is not thought to have taken propylene from Chevron's cracker.

High spot ethylene numbers had still to react to the problems in the Houston area. As one player pointed out there is little prospect of upping either ethylene or propylene imports or derivative imports. Another said the most likely scenario is for US players to cut derivative production and stop exporting derivatives.