Lotte restarts Louisiana MEG plant: sources

Lotte Chemical has restarted its 700,000 mt/year monoethylene glycol unit in Louisiana, but three other US MEG plants remain shut, keeping supply tight, market sources said.

A source familiar with Lotte's operations said June 11 that the company's Lake Charles unit, which shut on May 21 because of a critical electrical equipment failure, had begun producing the week of June 7.

Lotte declared force majeure on MEG as well as diethylene glycol (DEG) and triethylene glycol (TEG) on May 22, according to a customer letter seen by S&P Global Platts.

Torrential rain caused the electrical equipment failure and severed electricity supply to process equipment, the letter said. The force majeure remained in effect June 11.

In addition, Nan Ya Plastics' 800,000 mt/year MEG unit in Point Comfort, Texas, had shut down the weekend of June 5 for two weeks, sources familiar with company operations said. Nan Ya's smaller 370,000 mt/year MEG unit at Point Comfort had been shut for an extended turnaround.

Nan Ya shut the larger plant on a lack of ethylene feedstock after sister company Formosa Plastics USA shut down its 1.2 million mt/year cracker at the Point Comfort complex. Formosa said in June 4 filing with the Texas Commission on Environmental Quality that ethane feed to the cracking furnaces was lost "due to a breach in supplier's pipeline."

Indorama Ventures' 358,000 mt/year MEG unit in Clear Lake, Texas, also had not yet restarted after completing a turnaround at the end of May, according to sources familiar with company operations. Sources said the company was expected to attempt a restart over the weekend of June 12.

None of the companies responded to requests for comment.

"No one can run," a market source said. "We have so much MEG capacity and we don't have any MEG."

The US has 4.65 million mt/year of MEG capacity, 2.5 million mt/year of which has started up since early 2019.