Louisiana petchem producers planning to ride out the storm

Author: Lane Kelley


HOUSTON (ICIS)--With no chemical plants in Louisiana shut down yet and only one refinery closed because of Tropical Storm Barry, it looks now like the state’s petrochemical industry will ride it out.

“The size of the storm is much smaller than some of the ones we’ve had to deal with in recent years,” said a representative of a major plant on the riverbank south of New Orleans. “Right now, we’re not too worried.”

If Barry becomes a hurricane over the next day or so that might change, of course. The storm is headed for the Louisiana coast and expected to make landfall near the state’s central or southeastern coast Friday night or Saturday, according to the National Hurricane Center (NHC).

The latest NHC map projection shows Barry’s path almost totally outside the state of Texas and within Louisiana and some of western Mississippi.

A hurricane watch is in effect for much of the southern part of the state, extending from the Mississippi River to Cameron, Louisiana.

The hurricane watch covers almost half of the US capacity in three major US chemicals - styrene (49%), ethylene dichloride (47%) and vinyl chloride monomer (46%) - which have plants in Louisiana, according to ICIS.

Three other chemicals - polyvinyl chloride (PVC), caustic soda and chlorine - have over 40% of their US capacity in Louisiana.

Chemical % of US capacity in Louisiana
Styrene 49%
Ethylene Dichloride (EDC) 47%
Vinyl Chloride Monomer (VCM) 46%
Polyvinyl Chloride (PVC) 43%
Caustic Soda 42%
Chlorine 42%
Ethylene 26%
Propylene 23%
Polyethylene (all grades) 22%
Benzene 18%
Polypropylene (PP) 17%
Butadiene (BD) 17%
Mixed Xylenes (MX) 11%
Toluene 8%

Westlake Chemical provided a response typical of many producers contacted on Thursday. A Westlake spokesman said all of the company’s plants in Louisiana are taking precautions for heavy rain and wind, but will operate through the storm.

Shintech, the largest producer of PVC in the US, is watching the storm situation but as of Thursday afternoon planned to continue normal operations at its chlor-alkali and polyvinyl chloride (PVC) plants in Plaquemine and Addis, Louisiana.

Many petrochemical producers and refineries  - such as ExxonMobil, Shell, BASF, the Louisiana Offshore Oil Port (LOOP), Sasol - said likewise, that they are monitoring the storm and implementing severe weather plans but have not made any significant operational changes yet.

Shell said operations are stable for its refineries in Louisiana, but that it is preparing for a high-wind and heavy-rain event. Shell operates a 235,000 bbl/day refinery in Convent and a 238,000 bbl/day in Norco, Louisiana.

Oil producers are not taking any chances with Barry, though.

A little more than half of the current oil production in the Gulf of Mexico has been shut-in because of preparations for Barry, a federal agency said on Thursday.

About 53% of the current oil production in the Gulf of Mexico has been shut-in, according to the Bureau of Safety and Environmental Enforcement (BSEE).

The agency added that approximately 44.5%of the Gulf’s natural gas production has also been shut-in.

Total Percentage
of Gulf of Mexico
 191  28.55%
 7  33.33%
DP Rigs
 11 55%
Total shut-in Percentage of GOM Production
 1,009,012 (BOPD)  53.39%
1,237.28 (MMCFD)  44.51%

Plaquemines Parish, home to many petrochemical plants in Louisiana and just south of New Orleans, issued an evacuation order early Thursday that will affect approximately 8,000-10,000 people.

Parish officials said the evacuation order stems from federal and state officials who say the Mississippi river could breach the levee.

Also in Plaquemines, Phillips 66 began shutting its Alliance Refinery in Belle Chasse, Louisiana, a company source said. The plant is on the west bank of the Mississippi river.

“The [Mississippi river] is still so high with the months-long flood stage, so even a little storm surge would be a big deal,” the source said. “It’s been this high since [February]…that has to be a record.”

The city of New Orleans, Louisiana, braced for a worst-case scenario after heavy rain on Wednesday flooded the city, with parts of the metro area under an emergency flash flood warning on Thursday.

Louisiana governor John Bel Edwards declared a state of emergency there on Wednesday because of the low-pressure system bearing down on the state from the Gulf of Mexico.

On Thursday, Edwards sent a letter to President Donald Trump requesting a federal declaration of emergency in advance of Tropical Storm Barry making landfall along the Louisiana coast.  The declaration requests that the state receive supplementary federal resources as soon as possible should they be needed.

Louisiana is home to several refineries and chemical plants, and Barry could threaten these directly by disrupting operations. Indirectly, floods could prevent plants from receiving feedstock or shipping out finished products - even if operations themselves were unaffected by Barry.

Power disruptions could also stop the plants from running.

Louisiana’s Port Fourchon, located on the Gulf of Mexico, issued recommended evacuations this morning. The evacuation includes all non-essential personnel in anticipation of water covering the main roadway below the floodgates.

Farther west in Louisiana, a source at Westlake Chemical, which produces styrene at its 260,000 tonne/year plant in Lake Charles, said the biggest concern now is that Barry could threaten their energy supply.

“Specifically, natural gas,” the source said. “We get most of our natgas from the Mississippi river side of Louisiana. If they start shutting down those wells, it could affect us.”

Barry has also brought the shutting of flood gates in Louisiana, causing rail companies to detour traffic around New Orleans.

Norfolk Southern said it is working with interline partners to detour over alternative routes where possible. The rail line also is taking steps to prepare for any floods caused by the storm, with the company working with customers to identify switching needs.

Union Pacific will also reroute traffic moving through New Orleans and has placed embargoes for New Orleans and Avondale, the company said.

Kansas City Southern said it will shipments through detours if they are available.

Additional reporting by Bill Bowen, Lucas Hall, Steven McGinn, Anna Matherne, Al Greenwood, Adam Yanelli, Zachary Moore, Larry Terry, Amanda Hay, Jessie Waldheim and Stephanie Kirby