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Sasol declares force majeure on LLDPE, HDPE after Hurricane Laura: letter

Highlights

Restart schedule is being assessed: company

Company working toward restoring to normal levels: letter

Houston — Sasol Chemicals North America declared force majeure on all polyethylene products Aug. 31, including linear low density PE and high density PE grades at their Texas and Louisiana manufacturers in light of Hurricane Laura's assault on Aug. 27, according to a letter to customers obtained by S&P Global Platts.

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Sasol's Lake Charles, Louisiana complex is home to 470,000 mt/year LLDPE plant that started up in February 2019 and a 420,000 mt/year low density PE unit that was damaged by fire during commissioning in January and has remained shut for repairs.

"Sasol's Lake Charles Chemical Complex shut down on Aug. 25 in anticipation of the storm," the letter said.

"Many of the company's employees and contractors followed the mandatory evacuation order and have not been able to return yet, the letter stated.

"At this time, the damage and impact on a restart-schedule is being assessed," and the company is working toward restoring its operations to normal levels, the letter stated.

The company was not available for immediate comment at the time of publication.

Earlier on Aug. 31, the company posted an update on its website that said the storm caused widespread electrical blackouts and other damage, preventing Sasol from operating most utility systems.

"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's statement said, referring to Entergy.

The company said further that operations recovery crews were assessing damage at the Lake Charles site and early reports indicated no apparent damage to process equipment and no flooding damage was seen as a result of storm surge.

"Start-up of the plants will depend on the availability of electricity, industrial gases, other feedstocks and the restoration process. We are engaging with our customers and suppliers regularly regarding the impacts on production,' the company said.

In general, polyethylene market participants anticipated the declaration as Hurricane Laura directly hit Lake Charles, which caused extreme power outages and damages in some areas and is home to a handful of petrochemical plants.

Producers are still assessing how much production was lost from the hurricane and are uncertain of what to expect in the coming week, one trader source said.