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FACTBOX: More force majeures, shutdowns emerge from US Gulf Coast petrochemical producers

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FACTBOX: More force majeures, shutdowns emerge from US Gulf Coast petrochemical producers

  • Author
  • Kristen Hays    Mary Hogan    Emmanuel Gallegos    Guilherme Baida
  • Editor
  • Richard Rubin
  • Commodity
  • Petrochemicals Shipping

Houston — More petrochemical force majeures and plant shutdowns emerged Feb. 18 as the US Gulf Coast continued grappling with a deep freeze that brought the coldest sustained temperatures seen in the region in more than a century.

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Formosa Plastics USA declared force majeure Feb. 17 on chlor-alkali products, including chlorine and caustic soda, while Dow Chemical declared Feb. 18 on numerous intermediate chemicals, including vinyl acetate monomer and, methyl methacrylate at sites in Texas, Louisiana and Kentucky.

Customer letters about the force majeures from both companies noted that impacts beyond the cold include ability to access truck and rail transportation to move products as well as restoration of electric power.

FACTBOX: Petroleum, power markets show signs of easing as Texas power returning

Celanese also declared force majeure Feb. 18 on multiple chemicals, including VAM and acetic acid. The company said it had to curtail western hemisphere production on inability to receive natural gas, electricity, industrial gas, potable and firefighting water and other raw materials necessary to operate their plants.

The Electric Reliability Council of Texas authorized utilities to end rolling blackouts on Feb. 18, despite more than 40 GW of generation remaining offline as a result of the freeze. Power was slowly being restored, though outages could persist because of damage to the distribution system or the need to restore power manually rather than by remote switching.

Market sources also said restarts were expected to be gradual, as inspections could be lengthy given the need to assess any leaks or cracks in pipes, and they need full power restoration to conduct those inspections.

"Resumption of supply is entirely contingent on a successful startup, ability to load products, and the resumption of utility services at the sites," Dow's force majeure letter said.

Here is a rundown of confirmed fallout from the freeze:


**Formosa Plastics USA: Declared Feb. 18 on PVC, 1.3 million mt/year of capacity at Point Comfort, Texas, and Baton Rouge, Louisiana, complexes.

**Dow Chemical: Declared Feb. 18 on multiple intermediate chemicals produced at plants in Deer Park, Freeport, Texas City and Bayport Texas, Hahnville, Louisiana, and Louisville, Kentucky; declaration includes vinyl acetate monomer (VAM), methyl methacrylate (MMA), glacial methacrylic acid (GMAA), butyl methacrylate (BMA), glycidyl methacrylate (GMA), 2-ethylhexyl Acrylate (2EHA), butyl acrylate (BA), and others; Dow informed South American customers

**Celanese: Declared force majeure Feb. 18 on multiple intermediate chemicals normally sold to customers in the US, Europe and the Middle East, including acetic acid, VAM, ethyl acetate and ethylene vinyl acetate (EVA)

**Total: Declared Feb. 17 on polypropylene produced at its 1.15 million mt/year La Porte, Texas, facility

**Formosa Plastics USA: Declared Feb. 17 on all chlor-alkali products

**LyondellBasell: Declared Feb. 15 on US polyethylene

**Flint Hills Resources: Declared Feb. 15 on polypropylene produced at Longview, Texas

**Olin: Declared Feb. 16 on US chlorine, caustic soda, ethylene dichloride, epoxy, hydrochloric acid and other products produced at its Freeport, Texas, complex.

**OxyChem: Declared Feb. 15 on US chlorine, caustic soda, EDC, vinyl chloride monomer and polyvinyl chloride.

**LyondellBasell: Declared Feb. 15 on US polypropylene

**INEOS Olefins and Polymers USA: Declared Feb. 15 on polypropylene

**OQ Chemicals: Declared Feb. 15 on US oxo-alcohols, aldehydes, acids and esters produced at its Bat City, Texas, operations


**Formosa Plastics USA: 513,000 mt/year PVC, 653,000 mt/year VCM, Baton Rouge, Louisiana

**Total: 1.15 million mt/year PP, La Porte, Texas

**Lotte Chemical: 700,000 mt/year MEG, Lake Charles, Louisiana

**Sasol: 463,000 mt/year cracker, 380,000 mt/year EO/MEG, Lake Charles, Louisiana

**Braskem: 360,000 mt/year PP Freeport, Texas; 475,000 mt/year PP La Porte, Texas; 225,000 mt/year PP Seadrift, Texas

**ExxonMobil: Cumulative 1.53 million mt/year from three units, HDPE and LLDPE capacity, Mont Belvieu, Texas

**Indorama Ventures: Port Neches, Texas, 235,867 mt/year cracker, 1 million mt/year ethylene oxide/monoethylene glycol unit, 238,135 mt/year propylene oxide unit, and 988,000 mt/year of MTBE capacity; Clear Lake, Texas, 435,000 mt/year EO, 358,000 mt/year MEG.

**Olin: Freeport, Texas complex, with 3 million mt/year of caustic soda and 2.73 million mt/year of chlorine capacity; 748,000 mt/year of EDC

**OxyChem: Ingleside, Texas, 544,000 mt/year cracker; 248,000 mt/year chlor-alkali; 680,000 mt/year EDC; Deer Park and Pasadena, Texas, 1.27 million mt in PVC capacity; 1.79 million mt/year of VCM capacity; 580,000 mt/year chlor-alkali

**Shintech: Freeport, Texas: 1.45 million mt/year PVC

**Formosa Plastics USA: Entire Point Comfort, Texas, complex, including three crackers with a cumulative capacity of 2.76 million mt/year; 875,000 mt/year of high density polyethylene; 400,000 mt/year of low density PE; 465,000 mt/year of linear low density PE; two PP units with combined capacity of 1.7 million mt/year; 798,000 mt/year of PVC; 1 million mt/year of caustic soda and 910,000 mt/year of chlorine; 753,000 mt/year of VCM; 1.478 million mt/year of EDC; and a cumulative 1.17 million mt/year of monoethylene glycol operated by sister company Nan Ya Plastics.

**ExxonMobil: Baytown, Texas, refining and chemical complex, including three crackers with a combined capacity of 3.8 million mt/year; 800,000 mt/year PP

**ExxonMobil: Beaumont, Texas, refining and chemical complex, including an 826,000 mt/year cracker; 225,000 mt/year HDPE; 240,000 mt/year LDPE; 1.19 million mt/year LLDPE with some HDPE capacity

**Dow Chemical: Certain units offline within Dow sites along the US Gulf Coast, but the company did not specify. Dow's Gulf Coast operations include a complex at Freeport, Texas, with three crackers able to produce a combined 3.2 million mt/year, two LDPE units with 552,000 mt/year and 186,000 mt/year HDPE; Dow's Seadrift, Texas, complex includes 490,000 mt/year LLDPE and 390,000 mt/year HDPE; Dow told South American customers in a letter dated Feb. 16 that the company was assessing impact on PE production capacity "and we know that our ability to supply various products could be affected."

**TPC Group: Houston site shut down, including 544,310 mt/year butadiene unit, when boilers lost steam

**Motiva Chemicals: Port Arthur, 635,000 mt/year mixed-feed cracker

**Shell: Deer Park, Texas, refining and chemical complex, including two crackers with a combined 961,000 mt/year of capacity

**Shell: Norco, Louisiana, refining and chemical complex, including two crackers with a combined capacity of 1.42 million mt/year

**Chevron Phillips Chemical: Pasadena, Texas, 998,000 mt/year HDPE


**US spot ethylene prices climbed 0.75 cents/lb to 41.75 cents/lb FD Mont Belvieu and 40.75 cents/lb FD Choctaw, building on earlier gains on cracker shutdowns

**VAM prices rose 1.13 cents/lb week on week Feb. 18, its highest level since August 2018, as Dow and Celanese each included VAM in force majeure declarations

**US polymer prices held steady amid muted activity amid power outages


**Houston Ship Channel: shut mid-afternoon Feb. 14; reopened Feb. 16 until late afternoon; reopened morning of Feb. 17 until evening; reopened morning Feb. 18; fog expected the week of Feb. 22 as temperatures rise

**Sabine Pass: port shut mid-afternoon Feb. 14, resumed inbound traffic midday Feb. 16, shut Feb. 17, reopened Feb. 18

**Corpus Christi: port shut Feb. 14, resumed boarding vessels Feb. 16 until late evening when shut again per weather; resumed boarding midday Feb. 17; closed Feb. 18 due to fog

**Union Pacific advised customers Feb. 18 that recovery efforts were making progress as weather conditions improved, and commercial power and water were slowly returning to areas of its network in Texas, though ongoing road closures hindered moving crews through the South.

**BNSF Railway advised customers on Feb. 16 that many trains in Texas were holding due to widespread power outages and road closures that affected movement of train crews and other personnel, and delays in shipments were expected to last until conditions improve.