BP says Innovene divestment unaffected by Texas cracker fire

Source: ICIS News

2005/08/11

LONDON (CNI)--The explosion and fire at BP's Olefns 2 cracker at Chocolate Bayou, Texas last night will not affect the oil major's plans to divest its Innovene olefins and derivatives business, a company spokesman said on Thursday.

The Chocolate Bayou complex is operated by Innovene which BP said is still on schedule for divestment towards the end of this year. Although it has yet to decide irrevocably on the divestment process, an initial public offering (IPO) remains the preferred route, the official added.

BP has already taken writedowns and charges of more than $1.5bn (Euro1.2bn) against its Innovene assets ahead of the spin-off.  Although it has yet to issue any assessment of the likely cost of the explosion and fire at Chocolate Bayou, it has conceded that damage to the cracker complex was serious.

BP took a charge of more than $800m after a fire at its Texas refinery earlier this year.

The Olefins 2 cracker could be out of action for some time, although BP and Innovene officials will not be able to make a detailed assessment of the damage until the site has cooled down.

Fire fighters were this afternoon damping down the site and BP has yet to officially declare that the fire has been put out. No-one was injured as a direct consequence of the explosion or fire but a spokesman for BP in Houston said a fire-fighter had been taken to hospital with a suspected heart attack.

The Olefins 2 cracker has an ethylene capacity of about 820,000 tonne/year. It also has the capacity to produce propylene, butadiene and hydrogen, according to the BP Houston spokesman.

Olefins 2 is the smaller of two BP crackers at Chocolate Bayou: Olefins 1 has an ethylene  capacity of about 954,500 tonne/year.