Hurricane Harvey Hits US Petchems Hard

29.08.2017 -

Along the US Gulf Coast, oil and petrochemical producers in Texas were struggling to mop up and assess possible damage to their facilities on Aug. 29 after high winds and torrential rain from Hurricane Harvey battered the industry’s heartland a day earlier. The US National Hurricane Center has warned that “unprecedented” rainfall could be expected in some areas by the end of the week, while record flooding was forecast for many parts of southeast Texas.

As a precaution, or because of a power outage, many production facilities were taken offline in Texas as the hurricane hit. Producers in neighboring Louisiana, where the tropical storm was thought likely to make landfallnext after backtracking over Texas, were also battening down the hatches.

According to market research agency IHS Markit, Texas is home to about 70% of US ethylene capacity, and nearly half of it was non-operational on Aug. 28. Some 32% of total US chlor-alkali production was also offline or operating at lower rates, along with about 57% of benzene and 41% of paraxylene capacity.

Major refineries across Texas were off stream on the Monday following the weekend storm surge but operators said they expected to restart them in the next several days, barring unforeseen circumstances. As the week started, some Texas ports remained closed, and several railroad companies issued embargoes or suspended operations amid widespread flooding.

On Aug. 28 and 29, press and market reports said ExxonMobil’s Baytown chemical complex and refinery near Houston were down, and Shell Chemical had shuttered its chemical complex and refinery at Deer Park. Chevron Phillips Chemical reportedly ceased some operations at Cedar Bayou and Sweeny as well as at its complex at Pasadena, Texas.

The refinery operated by Petrobras at Pasadena was seen to be offline early in the week, along with its refined products terminal at the site. Phillips 66 suspended operations at its Freeport terminal, including the LPG export facility. Its refinery at Sweeny was also shuttered, along with Occidental Chemical’s ethylene, chlor-alkali and vinyls plants.

Formosa Petrochemical said it shut its ethylene, polymers and chlor-alkali plants at Point Comfort but hoped to restart them later in the week. At Chocolate Bayou, Ineos stopped production at its cracker, in addition to its acrylonitrile plant at Green Lake. LyondellBasell closed plants at Chocolate Bayou, Bayport, Corpus Christi, LaPorte and Matagorda, while its Houston refinery was reportedly running at a reduced rate. The Victoria facility was already down for maintenances but is planned to restart when weather permits.

In the downstream segment, Braskem is said to have halted its Seadrift PP production and Celanese its Pasadena methanol plant. Beyond that, Hexion’s Deer Park epoxy resins facilities were spotted off stream, in addition to INVISTA’s  nylon intermediates production. At the latter site, Hexion’s Deer Park epoxy resin unit was said to be down, as well as Javelina’s gas processing facility at Corpus Christi. German engineering plastics producer Covestro cut output at its plants for isocyanates, polycarbonate, aniline and chlorine at Baytown, while Dow Chemical said earlier it was preparing for possible closures at its Texas sites.

Due to the hurricane, a number of petrochemical producers had to declare force majeure. It was unclear which were still in effect at press time. Forces majeure were declared by Formosa Plastics for PE and PP, by Ineos for PP, by LyondellBasell for PE and butadiene and by Ascend for acrylonitrile, hydrogen cyanide and disodium iminodiacetate.

Market researchers said it was not yet clear how prices for ethylene and polyethylene might rise due to the storm-related closures. They noted that the markets had excess supply before Harvey, with several new plants starting to come online contributing to the glut. However, ethylene was thought likely to point upward if plants were damaged and a restart delayed or flooding hampered normal shipping of derivatives.