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Formosa restarts, Sasol working to restart Louisiana petrochemical complexes

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Formosa restarts, Sasol working to restart Louisiana petrochemical complexes

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Crackers at Sasol's Lake Charles complex kept running through freeze, derivatives begin restarting

Formosa's Baton Rouge, Louisiana, complex running, Texas operations yet to restart

Houston — Formosa Plastics USA restarted its Baton Rouge, Louisiana, complex while Sasol began restarting shut units at its Lake Charles, Louisiana, operations over the Feb. 20 weekend after a deep freeze enveloped much of the US Gulf Coast with sustained sub-freezing temperatures.

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Sources familiar with Formosa's operations said the Baton Rouge complex, which has a 513,000 mt/year polyvinyl chloride unit and a 653,000 mt/year upstream vinyl chloride monomer plant, had restarted, but the company's Point Comfort, Texas, complex remained shut pending post-freeze damage assessments. The company did not immediately respond to a request for comment.

Sasol executives discussed freeze fallout Feb. 22 during the company's call with analysts regarding results from the second half of 2020.

"I can report that after most units being down the past week, startup operations commenced over the weekend," CEO Fleetwood Grobler said. "We hope that in the next seven to 10 or 14 days, we could be back online," he said.

CFO Paul Victor said both crackers at the Lake Charles site kept running through the freeze, but "we are still working to restore operations for the derivative plants."

Sasol operates the site's 439,000 mt/year cracker, and LyondellBasell operates the larger 1.5 million mt/year facility that is part of a joint venture formed in 2020 by the two companies.

Derivatives include a 470,000 mt/year linear low density polyethylene unit and a 420,000 mt/year low density PE plant also operated by LyondellBasell in the joint venture, and a Sasol-operated 380,000 mt/year ethylene oxide/monoethylene glycol unit.

Victor said that that estimated restart period could reach up to 14 days for more complex units, "where we do face challenges, trying to get them warmed up and assessed for any damages, so it's too early to give indications on the financial impact" of the freeze and shutdowns.

LyondellBasell declared force majeure Feb. 15 on US polyethylene and polypropylene, according to customer letters seen by S&P Global Platts. The company produces 3.55 million mt/year of PE in Texas, Illinois and Iowa, and 1.3 million mt/year of PP in Texas and Louisiana, according to S&P Global Platts Analytics.

Formosa's Texas complex has three crackers with a cumulative capacity of 2.76 million mt/year; 875,000 mt/year of high density PE; 400,000 mt/year LDPE; 465,000 mt/year of LLDPE; 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 ethylene dichloride; and a cumulative 1.17 million mt/year of monoethylene glycol operated at the same site by sister company Nan Ya Plastics. "It will still be a few days" before restarts begin at Point Comfort, a source said.

The freeze that affected much of the US descended on the US Gulf Coast Feb. 14 with sub-freezing temperatures through Feb. 17. Market sources said US Gulf Coast industrial plants were not built to withstand such sustained sub-freezing temperatures, and restarts could be lengthy given necessary inspections to detect any damage to millions of exposed pipes.