Shell Chemicals confirms Moerdijk flaring on 'factory failure' in restart procedure

London — Shell Chemicals' Moerdijk petrochemical plant in the Netherlands suffered a "factory failure" on Aug. 12 which forced it to flare, with units subsequently restarted in the same evening, a company source told S&P Global Platts Aug. 14.

"We can confirm the fact that Shell Moerdijk is flaring due to a factory failure," the company spokesman said. "We have identified the cause of the failure, allowing us to restart the factory. The full restart takes a few days, with the flaring gradually decreasing."

There was a limited market impact on the olefins market in Europe from the outage, according to market sources.

Earlier in the year, Shell postponed planned maintenance works at the Moerdijk facility until after the summer due to the impact of the coronavirus pandemic on availability of personnel. Market sources said the works are expected to take place around mid-September and will proceed as planned.

The Moerdijk cracker has the capacity to produce around 910,000 mt/year of ethylene, 510,000 mt/year of propylene and 115,000 mt/year of butadiene, according to data from S&P Global Platts Analytics.

In addition, the company produces 500,000 mt/year of benzene, 1 million mt/year of styrene and 155,000 mt/year of ethylene glycols.

Although there was limited impact on most aromatics and olefins prices from the flaring, one monoethylene glycols distributor said it was revising its offers in light of the Moerdijk issues in an already tight European MEG market.

"I'm pulling my offers from market. I hear shell might not be offering MEG for a few days," a trader said Aug. 13.

MEG supply in Europe had become more limited with a generalized reduction in US production in recent months, tightening supply there. The dependence of European MEG consumers on US resupply increased in recent years based on the new capacities there. With the tighter supply, any import vessels are not expected to arrive until the end of August at the earliest.

Spot FCA trucks were heard trading as high as Eur580/mt FCA Antwerp in the week, up from the Aug. 7 assessment of Eur505/mt FCA NWE, its highest level since Nov. 1, 2019, according to Platts data.