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Gulf Coast petrochemicals regroupGulf Coast petrochemicals regroup

September 22, 2005

2 Min Read
Gulf Coast petrochemicals regroup

As waters recede and damage is assessed, a picture of a wounded but not crippled gas and petrochemical industry along the Gulf Coast emerges, according to government agencies and industry consultants. As of Sept. 7, Chemical Market Assoc. Inc. (Houston, TX) reports that the Dept. of the Interior had determined that only 16 out of 163 crude platforms had yet to begin production, with 57% of the Gulf of Mexico''s oil "shut in." Fully 40% of the region''s natural gas was inaccessible as well.

These feedstock shortages, as well as facility damage, had affected bigger petrochemical players, with leaders like Shell declaring force majeure allocation levels, since ethylene production was at 50% of capacity and butadiene was at 75%. Shell, Dow, and ChevronPhillips have shut down multiple steam crackers in the region, pushing more than 5 million lb/yr of ethylene capacity offline. Propylene production sites totaling more than 1 million lb/yr in capacity were offline for ExxonMobil, ChevronTexaco, and ConocoPhillips in Louisiana and Mississippi. In terms of other feedstocks, CMAI reports that ChevronPhillips'' Pascagoula, MS paraxylene output, which is used for PET, has been shut down, taking approximately 9% of North American capacity offline. ChevronPhillips is restarting its Donaldsonville, LA styrene plant, representing 13% of North American capacity. Closure of Shell''s Norco, LA butadiene plant has taken 9% of that material''s production offline.In terms of resins, Dow''s Taft, LA polyethylene plant, with an annual capacity of 1.6 million lb/yr, remained shut down, and the company''s Norco, LA polypropylene plant was also non-operational, representing 2.4% of North American capacity.Many of these shutdowns resulted from power outages, which are alleviating, according to the Dept. of Energy. As of Sept. 8, 731,434 customers remained without power in Louisiana and Mississippi, which is down from 2.7 million immediately following Katrina''s landfall, and Mississippi estimated that all customers who can receive power would have by Sept. 11. Four natural gas processing plants, representing 5.5 billion cu ft, remain offline due to hurricane damage, pulling an energy source for the power plants offline.Atmos Energy, which is America''s largest pure natural gas distributor, estimated that 230,000 of its customers, mostly in Louisiana, had been affected, while Kinder Morgan Energy Partners LP reported that seven of its nine natural gas terminals were operational. Entergy, which has 17 generating units in New Orleans, reports that eight remain offline, affecting 197,533, or 92%, of its New Orleans customers. In terms of shipping, as of Sept. 7, the lower Mississippi was open during daylight hours to traffic with drafts of at least 39 ft, and the port of New Orleans was hoping to open to commercial cargo ships by Sept. 14.-Tony Deligio; [email protected]

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