LONDON (ICIS)--Good preparations have been made to cover Europe’s heavy 2019 cracker maintenance slate, although doubts remain.
While the wider market is largely focused on the magnitude of the volumes required to compensate for the outages, players are under no illusion that they will be dealing with a complex situation, and problems will be inevitable.
Europe’s ethylene and propylene producers and consumers have been planning for the maintenance outages for quite some time through swaps and physical trade.
Several derivative units have even timed their maintenances to coincide with that of the nearby crackers.
“We have done everything we can [to cover our commitments] up to this point. On paper, we are in good shape," a source said.
“Covering all the volumes that are needed? That is under control," a second source said.
However, there is a recognition that the preparation and logistics behind all these arrangements are very complex and delicate, and therefore there is little-to-no flexibility in the European system to manage the situation easily.
Some ethylene and propylene volumes will be coming from outside of Europe, so the onus will be on vessels to arrive on time and discharge effectively as terminal and/or storage space is not unlimited.
“There are limitations on jetties, terminals and tanks,” the second source added.
Maintenance is scheduled to take place in various sectors along the ethylene ARG pipeline between 9 March and 17 April, and is also planned for the PRG propylene pipeline in the spring, according to sources.
These pipeline outages will add yet another layer of complexity to the situation.
Operations will have to run like clockwork to ensure a smooth situation, but players know that unexpected issues could quickly change that.
“In all likelihood, things will be different to what we know today,” the second source added.
Despite all the potential challenges to come, market players are confident that a solution will be found.
As a case in point, a few sources mentioned difficulties posed by low water levels on the Rhine at the end of last year.
"Everyone is calm. We know there is a big challenge ahead of us, but there is a positive attitude, experience and creativity," the second source said.
The crunch point will come in the second quarter, with the trickiest bit when maintenance at Europe’s two largest crackers – BASF’s in Antwerp, Belgium and Shell’s in Moerdijk, The Netherlands – coincide in May.
Operators will be hoping that the crackers resume operations on time and, of course, will be working towards that.
However, to expect all the crackers to be back online and running normally following maintenances will be "unheard of", according to a source.
On the flip side, demand remains uncertain.
Buyers are cautious and demand levels unclear, so the net impact of all the planned supply constraints is difficult to determine.
Pictured: BASF's flagship site in
Focus article by Nel Weddle
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