Oil output recovers; Louisiana chem plants stay down

HOUSTON (ICIS)–US oil production in the Gulf of Mexico continues to recover, along with some petrochemical plants in Texas.

Meanwhile, chemical plants in Lake Charles, Louisiana, the area hardest hit by Hurricane Laura, could wait at least two more weeks before they can resume operations, as the region’s electrical grid suffered catastrophic damage, according to a power company.

The power company, Entergy, expects to energise the first of its transmission lines into Lake Charles in mid-September, it said. Before that happens, power could remain out in Lake Charles.

All nine transmission lines that deliver power into the Lake Charles area are out of service, said Entergy. It owns seven of those lines, and all of them have suffered catastrophic damage.

Power outages are among the main reasons why petrochemical companies have not started their plants after Hurricane Laura.

The storm made landfall early on 27 August in Louisiana, near the border with Texas.

In Louisiana, the outages are clustered around Lake Charles, which is home to several petrochemical plants.

In Texas, the outages are concentrated in the eastern part of the state, which includes Orange, Port Arthur, Port Neches and Beaumont.

The number power outages reported to utility companies have fallen, but they remain high as shown in the following table.

	2-Sep	3-Sep
Louisiana	227,430	162,687
Texas	41,330	16,183

Source: PowerOutage.US

DAMAGE TO THE ELECTRIC GRID
Entergy, the main power distributor in southwestern Louisiana and eastern Texas, said its distribution and transmission systems have suffered extensive damage. Key transmission lines are out of service.

“Our damage assessments indicate catastrophic damage to our electrical infrastructure. We expect the recovery to be as difficult and challenging as we have ever faced in the past,” the company said.

Entergy listed the following damage sustained by its system in Texas and Louisiana

Distribution: 9,760 poles, 3,729 transformers and 18,706 spans of wire damaged.

Substations: 292 impacted.

Transmission: 219 lines out of service.

Louisiana suffered most of the damage.

Entergy noted that the eye wall of Hurricane Laura passed directly over Lake Charles. This brings the most damaging winds and intense rainfall.

Entergy has completed its assessments, and the damage is some of the most severe that the company has ever experienced. Before power can be restored to Lake Charles, the transmission lines must be rebuilt, Entergy said. Those that received major damage may need to be fully reconstructed in parts.

Once Entergy restores the first transmission line, it will focus on re-energising other transmission facilities needed to restart power plants within the Lake Charles area, the company said. This will allow Entergy to power essential services that are critical to public health and safety.

There could be some power leftover for customers, although Entergy did not say how many or explain how it would decide who will get their electricity restored.

Some power plants in Lake Charles were damaged, and Entergy is repairing these to make them ready to generate power. Entergy did not say when it could complete these repairs.

For the rest of the transmission lines feeding Lake Charles, it could take weeks before all of them are rebuilt, Entergy said. Until then, the resumption of normal service could be limited.

In Texas, six of the nine major transmission lines that help power Entergy’s customers in the state are out of service. Four of these lines bring power to or from Louisiana. “A good number of the transmission structures within these lines were damaged beyond repair and require complete replacement,” Entergy said.

In Texas, crews have found more than 1,000 downed distribution poles, more than 200 blown transformers and 380,000 feet (116,000 metres) of downed wire.

As of Thursday morning, 9,068 Entergy customers in Orange, Texas, lacked power, the company said. Out of those, 6,500 needed a transmission line source into Entergy’s substations in Cordrey and Front Street. That should soon be completed, and these customers should have their power back on Friday.

The remaining customers in Orange need repairs to distribution lines, Entergy said. Those should be completed soon, with power being restored later on Thursday.

In Groves, Nederland, Port Arthur and Port Neches, Entergy said just 64 customers are without power. It did not say when these customers could get their power restored.

PLANT UPDATES
LyondellBasell is assessing damage to its polypropylene (PP) plant in Lake Charles, according to market sources. The company has not been able to perform a full assessment yet, as power remains offline and local authorities continue to limit movements. Logistics in the area have also been impacted, with rail and barge traffic facing limitations.

Sasol declared force majeure on alcohol, surfactant, alkylate and glycol products produced at its complex in Lake Charles. The company has not been able to perform a full assessment yet, also due to lack of power and restricted movement.

High wind speeds resulted in damage to the cooling towers, the company said. Otherwise, early assessments indicated no damage to process equipment, and no flooding impact from the storm surge.

Sasol produces ethylene, propylene, ethylene oxide (EO), ethylene glycol (EG), phenol, linear low density polyethylene (LLDPE), surfactants and other chemicals at the Lake Charles complex.

The company has declared force majeure on EG after the hurricane, according to market sources.

It also declared force majeure on LLDPE and high density PE (HDPE), according to a customer letter.

Sasol produces HDPE under a joint venture with INEOS in La Porte, Texas.

Westlake Chemical said late on 27 August that, based on initial assessment, its facilities at Lake Charles incurred limited physical damage from Hurricane Laura.

The restart timing “will primarily depend upon the availability of electricity, industrial gases and other feedstocks”, the company said in a statement. Westlake did not single out or highlight any damage to transmission lines.

Westlake’s plants in Lake Charles include a joint venture ethane cracker, several units that produce low-density polyethylene (LDPE), linear low density PE (LLDPE), polyvinyl chloride (PVC), chlor-alkali (chlorine and caustic soda), ethylene dichloride (EDC) and vinyl chloride monomer (VCM).

Following the storm, Westlake declared force majeure on PVC and VCM, as well as on LDPE and LLDPE, market sources said.

The LACC cracker in Lake Charles remains down, market sources said. LACC is a joint venture made up of Westlake and Lotte Chemical.

Lotte declared force majeure on EG, according to market sources.

CITGO said its refinery in Lake Charles received damage from high winds as a result of Hurricane Laura. It does not expect to restart the refinery immediately, and it will not have a restart date until it fully assesses the storm damage.

Firestone Polymers’ US styrene butadiene rubber (SBR) plant remains shut down, it said. It suffered wind damage.

Louisiana Pigment said, “Due to the extensive damage to the infrastructure supporting our area, it will be much longer than originally expected to restore services.”

It does not know when employees will be able to return to work.

The plant is near Lake Charles and makes titanium dioxide (TiO2).

Louisiana Pigment is a 50/50 joint venture between US-based Kronos Worldwide and UK-based Venator Materials.

WR Grace said its catalyst plant in Lake Charles suffered no significant damage.  It does not expect any significant effect on deliveries to customers. Shipments from inventory in Lake Charles will return this week, while the company works on a restart. Catalyst production will also be shifted to other plants as needed until Lake Charles operations resume.

The Lake Charles plant is the world’s largest refining catalyst plant, Grace said. It makes sodium silicate, fluid cracking catalysts and hydroprocessing catalysts.

Lion Elastomers is finishing repairs of minor damage at its styrene butadiene rubber (SBR) plants in Port Neches and Orange, both in Texas, and close to the state’s border with Louisiana.

Power should be restored at the Port Neches site in two weeks from Laura’s 27 August landfall, Lion said. That would put power restoration at 10 September.

For the Orange site, restoration could be three weeks from landfall, or 17 September, Lion said.

A cracker owned by Chevron Phillips Chemical in Orange remains offline, market sources said.

Chevron Phillips Chemical is starting up its cracker in Port Arthur, according to a regulatory filing.

Covestro declared force majeure on toluene diisocyanate (TDI) supplies in North America as of 1 September, according to a company spokesperson.

The company said that the force majeure declaration was necessitated by the recent shutdown of the company’s facility in Baytown, Texas, ahead of the arrival of Hurricane Laura, along with an unforeseen shortage of a key raw material used in production.

Baytown is near Houston, which saw few effects from the storm. Nevertheless, many companies in the region shut down operations as a precaution.

Plants farther away from the landfall site suffered little damage and are resuming operations.

INEOS Styrolution is restarting its styrene plants in Bayport, Texas, and in Texas City, Texas, according to a company source.

OCI is restarting its methanol plant in Beaumont, according to a regulatory filing.

OIL SHUT-INS DECLINE
Gulf of Mexico oil and natural gas output continues to recover after shut-ins from last week’s hurricane, the federal government reported on Thursday.

By mid-day, companies had shut-in 301,077 bbl/day of US oil production in the Gulf of Mexico, 16.3% of the total Gulf output, the US Bureau of Safety and Environmental Enforcement (BSEE) reported. Gas shut-ins totalled 420 million cubic feet (mcf)/day, 15.5% of gas production in the Gulf.

Personnel remain evacuated from 51 production platforms, just under 8% of 643 manned platforms in the Gulf of Mexico.

RAILROAD
Union Pacific has returned service to its main line network in the areas disrupted by Hurricane Laura, it said on 1 September. It will rely on generators throughout the Lake Charles area until power is restored.

Embargoes remain in effect, Union Pacific said.

BIOLAB FIRE
The Chemical Safety Board has sent a team to investigate the fire at the BioLab plant in Westlake, Louisiana, it said. The fire started hours after Laura made landfall on 27 August.

It was extinguished on 29 August, according to the Louisiana Department of Environmental Quality (LDEQ).

The plant makes trichloroisocyanuric acid and chlorinating granules among other specialty chemicals.

KIK Custom Products acquired the plant when it bought Chemtura’s pool-and-spa chemicals business in 2014.

Additional reporting by John Donnelly, Lucas Hall, Amanda Hay, Anna Matherne, Zachary Moore, Antoinette Smith, Alex Snodgrass and Adam Yanelli

Thumbnail image shows damage to power infrastructure. Source: Entergy

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