MOSCOW (MRC) -- Hurricane Laura left most of the US Gulf Coast unscathed, but Lake Charles, Louisiana, was hit hard, and petrochemical production units in the area could be offline for weeks, reported Chemweek.
Producers with assets there include Sasol, Westlake Chemical, Lotte Chemical, and LyondellBasell. Products affected include polyolefins, ethylene glycol, vinyls, and chlor-alkali.
"The Lake Charles area will be dealing with the impacts of the storm for weeks, if not the entire month of September," says a bulletin issued by IHS Markit on 31 August.
The Lake Charles area is home to 9% of US linear low-density polyethylene (LLDPE) capacity (by way of Sasol and Westlake Chemical), 10% of US low-density polyethylene (LDPE) capacity (Westlake), and 8% of US polypropylene (PP) capacity (LyondellBasell). All of this capacity is believed to be offline. On 31 August, Sasol declared force majeure on LLDPE and high-density polyethylene (HDPE) produced at its joint-venture site with Ineos in La Porte, Texas. Ineos also has force majeures in place for polyethylene, and Ineos, Formosa Plastics, and LyondellBasell have force majeures for PP.
Sasol says that manufacturing at its Lake Charles Chemicals Complex (LCCC) remains shut down. "The storm resulted in widespread electrical blackouts and other damage, preventing Sasol from operating most utility systems," says a statement from the company. "High voltage transmission line corridors into the Lake Charles area are damaged, and the full assessment is still in progress by a local power company." The company says cooling towers at the facility suffered wind damage, but process equipment at the facility does not appear to have been affected, nor has flooding been an issue.
Sasol has two steam crackers totaling 2 million metric tons/year of ethylene capacity at the LCCC. Downstream derivatives produced at the facility include ethylene glycol (EG; 300,000 metric tons/year of capacity), LLDPE (470,000 metric tons/year), alpha-olefins (110,000 metric tons/year), Ziegler alcohols (300,000 metric tons/year), and ethoxylates (110,000 metric tons/year). A 420,000 metric tons/year LDPE unit is slated for start-up by year-end.
"Start-up of the plants will depend on the availability of electricity, industrial gases, other feedstocks, and the restoration process," Sasol says. "We are engaging with our customers and suppliers regularly regarding the impacts on production." The statement notes that the hurricane is not expected to have "an adverse impact on any potential divestment transaction related to Sasol's base chemical portfolio in the United States."
Westlake Chemical on 27 August said that an initial assessment found "limited physical damage" at its Lake Charles facility. Like Sasol, the company said restart would depend on the availability of electricity and feedstocks. Products of the facility include ethylene dichloride (EDC; 1.8 million metric tons/year of capacity), vinyl chloride monomer (VCM; 990,000 metric tons/year), LLDPE (150,000 metric tons/year), LDPE (136,000 metric tons/year), and chlor-alkali, according to data from IHS Markit.
As of the morning of 31 August, operations at the facility had not resumed.
Westlake's Lake Charles complex accounts for 9% of US chlorine capacity, 10% of VCM capacity, and 14% of EDC direct chlorination capacity. While there is no polyvinyl chloride (PVC) capacity at Lake Charles, the complex supplies feedstock to PVC production facilities in Louisiana and Mississippi.
"The PVC market was already in a tight situation before the hurricane, and this setback in vinyls operations will definitely put more stress on the PVC market," says IHS Markit. "Chlorinated intermediates and the merchant chlorine markets are likely to see tightening supply, as a result, until operations are able to resume."
Lotte's 720,000 metric tons/year EG plant at Lake Charles is the largest in the world. That unit and Sasol's together account for 25% of North American EG capacity, and it will likely be several weeks before they return to normal operations, says IHS Markit. "Downstream derivatives and exports will be negatively impacted, as the EG market in the US has been very tight amid planned and unplanned EG outages earlier this year." Additional turnarounds have been planned for September and beyond, but they may be postponed, depending on how the supply situation plays out.
As MRC informed earlier, the US Energy Department announced the shutting of two of four sites of the national emergency oil reserve temporarily to remove workers ahead of Hurricane Laura, but that the remaining sites could deliver oil if the facility gets any requests for deliveries.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and PP.
According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
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