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OxyChem declares force majeure on PVC, upstream products in Texas: letter

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OxyChem declares force majeure on PVC, upstream products in Texas: letter

Highlights

Company shut all Texas production plants on freezing weather

Force majeure in effect across the PVC production chain

Houston — OxyChem, the chemical division of Occidental Petroleum, has declared force majeure on all products it makes across the polyvinyl chloride production chain because of sub-zero temperatures that has enveloped petrochemical plants across the US Gulf Coast, according to a customer letter seen by S&P Global Platts.

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The letter, dated Feb. 15, cited "unplanned disruptions outside our reasonable control."

The company shut down all of its Texas plants. In Ingleside near Corpus Christi, that includes a 544,000 mt/year cracker, a 248,000 mt/year chlor-alkali facility and a 680,000 mt/year ethylene dichloride unit; and 627,000 mt/year of caustic soda.

Along the Houston Ship Channel, the shutdowns include 1.27 million mt/year of PVC capacity; 1.79 million mt/year of vinyl chloride monomer capacity; and 515,000 mt/year of caustic soda.

"This is going to have a major impact on all these plants on the US Gulf Coast," a market source said. "The logistics is just going to be a nightmare."

The ship channel opened for outbound traffic only by midday Feb. 16 after shutting the afternoon of Feb. 14. However, despite sunshine, temperatures remained below freezing and another wave of colder weather was expected overnight into Feb. 17.

Shell also shut its refining and chemical operations at its Norco, Louisiana, complex, which includes two crackers with a cumulative capacity of 1.52 million mt/year of ethylene.