MOSCOW (MRC) -- Two major explosions and fire hit the TPC Group's Port Neches butadiene and raffinate petrochemical plant east of Houston, Texas, on Wednesday, injuring three workers, reported S&P Global with reference to the company's statement.
The site produces 20% of US butadiene, a raw material used in the production of synthetic rubbers and resins, according to a source familiar with company operations. Market sources said they had yet to see immediate effects on prices early Wednesday, amid thin activity ahead of the US Thanksgiving Day holiday.
"There must be some impact in the market, but it still needs to be assessed," a butadiene trader said, as market activity was sparse during the holiday week. The trader noted that the December contract price was expected to settle next week, and the incident could push prices up. Market participants had expected the contract price to decline.
The site also produces MTBE, and MTBE traders similarly said it was too early to see market fallout.
The outage of the plant is expected to have a "limited impact other than a spike in butadiene prices and more propane feedstock and less ethane on the US Gulf Coast," said Rob Stier, senior lead of global petrochemicals at S&P Global Platts Analytics.
The first explosion occurred at 1 am CST (0700 GMT), and a second occurred about 12 hours later on Wednesday afternoon, according to officials from Jefferson County, which called for evacuations in multiple cities in the area.
Troy Monk, director of health, safety and security for TPC Group, said at a news conference in between explosions that the blast and ongoing fire occurred in a processing area that makes butadiene.
Jefferson County Judge Jeff Branick said first responders were focused on "letting the materials burn themselves out" rather than extinguishing the fire while dousing surrounding tanks and equipment with water to keep them cool and contain the blaze.
Branick said at least three tanks were involved in the fire, but responders have not been able to get close enough to say what specific equipment was affected. The site's power shut down at the time of the explosion, he said.
Monk said first responders would continue those defensive actions to try to keep the fire from spreading while planning an offensive strategy to enter the "hot zone" and "eventually snuff the fire out."
Monk did not know how much butadiene had burned off or how much was left to burn. He said air monitoring was underway, but he had no information on levels of chemicals in the black plume of smoke emanating from the blaze.
Rain may help effort
He welcomed forecasts of impending rain in the area.
"Rain is going to be our friend in this instance," Monk said. "The plume is what it is, a byproduct of burning hydrocarbons that we have in the facility as well as burning metal and burning grass and anything else that the fire is consuming along the way."
The Sabine Neches Waterway was shut at 2 am CST Wednesday because of poor visibility as well as the TPC explosion, according to the Sabine Pilots, which oversees vessel traffic and safety on the channel that serves petrochemical and refining facilities in Port Arthur, Port Neches, Nederland and Beaumont. Vessel traffic resumed at about 10:30 am CST with a safety zone established in the area near the explosions. Ships could move through that zone if given permission to do so by the US Coast Guard's captain of the port, meaning traffic would move slowly between Port Neches and Beaumont, which could affect ships moving to and from ExxonMobil's refining and chemical complex in Beaumont and Energy Transfer Partners' oil terminal in Nederland.
A gasoline trader said no impacts from the waterway shutdown were expected "unless it really gets backed up in the ship channel, which it won't."
Located adjacent to the Sabine Neches River, which is part of the Sabine Neches Waterway, TPC's Port Neches plant can produce more than 900 million lb (426,000 mt) of butadiene and raffinate a year, according to the company's website. The source familiar with company operations said the site has two butadiene lines with capacities of 166,000 mt/year and 260,000 mt/year. The MTBE unit produces up to 400,000 mt/year.
Monk said an investigation of the cause of the fire and explosion would begin once it is extinguished.
Raffinate is a chemical building block used in the manufacture of MTBE and diisobutylene, which are both used as gasoline additives to improve octane performance. MTBE is a gasoline additive that boosts octane.
The infrastructure at the 218-acre Texas site includes pipelines, barges, and rail and tank cars. TPC, headquartered in Houston, was acquired in 2012 by private equity groups First Reserve and SK Capital.
Butadiene is one of the feedstocks for the production of acrylonitrile-butadiene-styrene (ABS).
According to ICIS-MRC Price report, in Asia, the falling prices of feedstocks for ABS production have been pushing prices of material down in the Russian market. LG Chem's import prices for November quantities were as follows for Russian buyers: natural ABS - at USD1,400-1,420/tonne FOB Korea, black ABS - at USD1,610-1,630/tonne FOB Korea, white ABS - at USD1,640-1,660/tonne FOB Korea. December prices may drop by another USD30-50/tonn.
Natural grades of Korean ABS went down to Rb138,000-143,000/tonne CPT Moscow, including VAT, in the domestic market in mid-November, whereas black ABS was offered at Rb156,000-160,000/tonne and white ABS - at Rb158,000-163,000/tonne CPT Moscow , including VAT.
Headquartered in Houston, TPC was acquired in 2012 by private equity groups First Reserve and SK Capital.
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