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Petrochemicals11-Sep-2024
HOUSTON (ICIS)–Several chemical companies are
shutting down plants in Louisiana, with others
taking other precautionary measures as the eye
of Francine – now a Category 2 hurricane –
approaches the coast for imminent landfall.
Roehm is taking its methyl methacrylate (MMA)
plant in Fortier, Louisiana offline.
BASF earlier on 10 September started procedures
to idle
operations in Geismar, North Geismar
and Vidalia, Louisiana.
Shell has shut
in oil and gas production in the Gulf
of Mexico at its Perdido, Auger and
Enchilada/Salsa assets, but its chemical
production sites in Geismar and Norco,
Louisiana, and Deer Park, Texas, were operating
normally as of Shell’s latest update on 10
September.
Operations were continuing at ExxonMobil’s
Baton Rouge, Louisiana plant as of 10
September.
Louisiana is home to just above 25% of the
total ethylene capacity in the US, according to
the ICIS Supply and Demand Database.
It also has close to 50% of the country’s
vinyls chain capacity – for polyvinyl chloride
(PVC), chlorine, ethylene dichloride (EDC),
vinyl chloride monomer (VCM) and caustic soda.
Other significant exposures close to 50% of
total US capacity include methanol,
ethylbenzene, styrene and low density
polyethylene (LDPE).
Upstream, an estimated 38.56% of current US oil
production and 48.77% of US natural gas
production in the Gulf of Mexico was shut in,
according to the
Bureau of Safety and Environmental
Enforcement (BSEE).
The Port of New Orleans has shut down, and
railroad companies
are warning customers of delays as traffic
will be diverted following the port’s
flood-gate closure.
Track the latest updates on Hurricane
Francine and its impact on chemicals on the
Topic Page: Storm Season 2024.
Thumbnail shows wind speed probabilities of
Hurricane Francine from the US National
Hurricane Center
Focus article by Joseph Chang
Ammonia11-Sep-2024
HOUSTON (ICIS)–As Hurricane Francine charged
forward with its landfall in southern Louisiana
as a category two storm late on Wednesday,
pushing out high winds and heavy downpours, US
farmers and fertilizer industry participants
appear prepared for the impacts but are hopeful
for a short-lived event.
With crops like cotton and sugarcane in the
fields and fertilizer plants scattered across
the landscape, there are concerns over how hard
Louisiana will be hit with the state already
seeing deteriorating conditions since late on
10 September.
Part of the concern anytime there are tropical
threats in this area is flooding from
significant rainfall especially within the New
Orleans area (Nola), whose port is crucial to
the fertilizer industry and heavily relied on
by agricultural interest as well.
With the last few days having been spent
getting ready for this storm that quickly
developed, the pace of fertilizers has now
taken a step back with a source saying “Eyes
are just on Francine at the moment. Nola is at
a standstill so hoping the impacts are not
long-lived.”
No production impacts have been reported with
producers having been quiet on their activities
outside of Canadian major Nutrien, who has both
production and other interests in the projected
path of the storm.
The company said in a statement on 11 September
there were no further updates, and it was
actively monitoring the storm and did have an
active comprehensive emergency response plan.
While the most recent US Department of
Agriculture (USDA) crop progress report on 9
September did not indicate any numbers for the
Louisiana corn crop, recent field reports have
indicated a good portion has been completed
with rice and soybean harvest underway in many
locations.
Cotton harvest has not begun for most of the
state with defoliating applications having
recently underway to prepare for machine
harvesting which potentially leaves the crop
more vulnerable.
Updates on the Louisiana soybean harvest have
not yet been released but it is likely some
acreage was underway or on the verge of being
fully mature with the USDA report showing there
was 68% of the acreage that have reached the
dropping leaves stage.
Like cotton this puts the crop far into
maturity and at risk for intense winds and
excessive rain.
By late on 11 September the storm was having
significant impacts on Mississippi as well,
which is home to not only considerable crop
acreage but fertilizer production and storage
but also distribution logistics and retail
operations.
Like Louisiana, there is considerable soybean
acreage in Mississippi, and it is possible that
some of this crop was also being harvested or
about to commence with it also seeing 68% of
their acreage now dropping leaves.
The state also has considerable cotton acreage
as well that could be severely damaged by
Francine.
The biggest impact from this hurricane for
fertilizers will probably not be seen in terms
of infrastructure damage to plants or wrecking
of logistic operations but it will be based on
how hard this hurt farmers and how long they
will be drying out.
Once it passes out of Louisiana and through
Mississippi the watch will be on for their
northern neighbors as the current forecasted
path has the storm moving upwards almost
parallel with the Mississippi River, bringing
further wind and considerable rainfall.
Depending on harvest progress some areas could
benefit from the added moisture ahead of making
fall applications.
Others will find the sudden shift in conditions
to be extremely limiting to further field work
over the rest of September, especially for any
acreage flooded in the coming days.
Crude Oil11-Sep-2024
SAO PAULO (ICIS)–Petrobras has begun start-up
procedures for Brazil’s largest natural gas
processing unit (UPGN) in Itaborai, near Rio de
Janeiro, the state-owned energy major said on
Wednesday.
The company received authorization from
regulator the National Agency of Petroleum,
Natural Gas and Biofuels (ANP) for industrial
operations on 9 September.
The facility will process gas from the pre-salt
layer of the Santos Basin, transported via the
new Route 3 gas pipeline; the project is
strategic for Petrobras, which has said it
wants to increase natural gas supply to the
Brazilian market profitably.
The move comes just days after the government
passed new regulations for the natural gas
market which are aiming to increase domestic
supply; the move was praised by chemicals
companies, although analysts concurred that
the key players to make the regulation a
success will be the oil and gas majors.
Currently in its final preparation phase, the
UPGN is undergoing process and equipment
calibration, and commercial operations are
expected to commence in early October.
The project will enable the flow of up to 18
million cubic meters per day (cbm)/day) and
processing of up to 21 million cbm/day of gas,
reducing Brazil’s dependence on imports.
Petrobras has renamed the complex housing the
UPGN to Boaventura Energy Complex, referencing
the preserved ruins of Sao Boaventura Convent
within the site.
Future plans for the complex include two
gas-fired thermoelectric plants and additional
refining units for fuels and lubricants.
Once completed, the facility will have
production capacities of 12,000 barrels/day for
Group II lubricating oils, 75,000 barrels/day
for S-10 diesel, and 20,000 barrels/day for
aviation kerosene, operating in synergy with
the Duque de Caxias Refinery.
Duque de Caxias is also where Brazil’s polymers
major Braskem operates some facilities, and the
company has repeatedly said it would expand
that site if more and cheaper natural gas was
available.
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Crude Oil11-Sep-2024
LONDON (ICIS)–UK GDP remained flat in July as
a rise in services output was offset by
declines in production and construction,
official data showed on Wednesday.
The country’s economic output was also flat in
June, according to the Office for National
Statistics (ONS).
Services output grew by 0.1% in July,
production output decreased by 0.8% while
construction fell by 0.4%.
In the first two quarters of the year, GDP in
the
UK rose by 0.7% and
0.6% respectively as it rebounded from
recession through the second half of 2023.
The Bank of England
cut interest rates by 25 basis points in
August as the country’s economic outlook
improved.
Liquefied Petroleum Gas11-Sep-2024
SINGAPORE (ICIS)–ICIS has revised down its
forecast for China’s combined imports of
propane and butane for 2024 because of
weaker-than-expected demand in fuel
applications. Wang Yen, Senior Analyst speaks
with Lillian Ren, analyst on the China propane,
butane and LPG markets.
Full-year LPG imports projected at 36.7
million tonnes
Fuel LPG demand falls on increased natural
gas usage amid weak economy
Strong feedstock LPG demand partly offset
decline in fuel consumption
Crude Oil11-Sep-2024
SINGAPORE (ICIS)–Francine has strengthened
into a hurricane and is moving northeastward
across the Gulf of Mexico, with landfall
expected in Louisiana, US, on Wednesday
afternoon or evening.
It turned into a hurricane as of 19:00 US
central daylight time (CDT) on 10 September
(00:00 GMT), the US National Hurricane Center
(NHC) said in its latest update.
At 19:00 CDT, Francine was located about 150
miles (240 kilometers) east of the mouth of the
Rio Grande and about 350 miles southwest of
Morgan, Louisiana, packing maximum sustained
winds of 75 miles/hour, according to the NHC.
Chemical companies are implementing
precautionary measures.
with some shutting down operations ahead of
Francine’s landfall.
Francine is expected to accelerate its
northeastward path tonight and into Wednesday.
Following landfall, Francine’s center is
expected to move northward into Mississippi
Wednesday night and continue through Thursday.
A storm surge warning is in effect for Sabine
Pass, Texas to the Mississippi/Alabama border,
Vermilion Bay, Lake Maurepas, and Lake
Pontchartrain.
A hurricane warning is in effect for the
Louisiana coast from Cameron eastward to Grand
Isle.
Ammonia10-Sep-2024
HOUSTON (ICIS)–Having lashed out across
northern Mexico and south Texas with rain and
winds over the past 24 hours, Tropical Storm
Francine has started to track further with an
expected landfall in Louisianna as a moderate
hurricane on 11 September.
With numerous manufacturer plants, storage and
shipping operations, especially within New
Orleans, the state of Louisianna is an
important segment for the US fertilizer
industry, which has quickly turned more
concerned over the possible hurricane.
Especially as the tropical threat has increased
in the last 36 hours and possibly bringing even
more destructive impacts than initial thought
over the coming days.
High winds, heavy rainfall and subsequent
flooding is a part of the immediate forecast
with the acreage in the path of Francine maybe
being subject to crop damage and significant
inundation.
This could decrease yields, halt harvesting and
will hold back any additional field work for
several weeks, including any fall fertilizing.
For now, the focus is on preparing as much as
possible for what might develop within the next
24 hours with producer Nutrien said it was
keeping watch and was getting ready.
“We are actively monitoring the situation
surrounding Tropical Storm Francine and have
comprehensive emergency response plans in place
to ensure the safety of our people and
operational integrity of our facilities,” said
Nutrien spokesperson.
CF Industries, with considerable operations in
the storm’s project path, has not responded to
inquiries over plans for storm preparation or
maintaining operations.
Also, without comment has been producer Mosaic,
but ammonia sources said it was expecting the
storm would have little bearing on current
activity as it is still a quiet period for the
nutrient.
A phosphate source said some imports volumes
which were scheduled to arrive soon have been
delayed a bit because of these renewed weather
concerns.
Overall the cautious but not overly concerned
sentiment is prevalent with it likely due to
the less severity of this potential hurricane,
but also because the fertilizer industry has
weathered some challenges in recent years like
the pandemic and international conflict.
Given the past events experienced, an industry
source said “I think the market has shrugged it
off so far because that’s how we’re doing most
shocks so far this year and it’s worked”.
Late on Tuesday afternoon Tropical Francine was
at a wind speed 65mph and moving northeast at
10mph with their predictions that it will
strengthen further as it moves closer to
landfall estimated now to be sometime during
Wednesday.
Potassium Sulphate (SOP)10-Sep-2024
HOUSTON (ICIS)–Australian BCI Minerals
announced the government has granted
environmental approval for the Mardie salt and
potash project in Western Australia.
With this approval secured, BCI Minerals said
it will commence operations by filling three
evaporation ponds starting 10 September.
Once filled, BCI Minerals will update its
groundwater monitoring and management plan
using data from extensive monitoring bores and
additional studies.
It will then resubmit the plan to the local and
federal environmental regulators for approval
prior to filling the remaining evaporation
ponds.
The company said construction at Mardie of the
salt-first component is progressing at 48%
completed, with further section work set to
commence on 10 September.
BCI added it remains on track to achieve first
salt on ship in Q2 2027.
Located 80km south of Karratha, in the Pilbara
region, Mardie is anticipated to produce 5.35
million tonnes/year of high-quality industrial
salt for export and 140,000 tonnes/year of
sulphate of potash (SOP).
It has an operating life expected to exceed 60
years with the export jetty finished and the
crystallizer construction now at more than 19%
completed.
“This is an important and pivotal moment for
BCI Minerals as we move into the next phase of
becoming Australia’s newest, high-quality
industrial salt producer. Australia hasn’t
developed a salt project of this significance
in 25 years, and the Mardie project will be
Australia’s largest solar salt project and the
third largest globally,” said David Boshoff,
BCI Minerals managing director.
“With the projected growth in demand for high
grade industrial salt in our target Asian
markets, BCI Minerals is strongly positioned to
supply global markets with Mardie salt for
generations.”
Ethylene10-Sep-2024
SAO PAULO (ICIS)–Storm Francine continues
strengthening into a hurricane as it approaches
the southern costs of the US, but its path
could veer slightly west and potentially hit
key petrochemicals sites in Louisiana which
border with Texas.
According to a Tuesday morning update from the
US’ National Hurricane Center (NHC), the storm
is to become a hurricane when it makes landfall
later in the day, although it should weaken
soon after that as it heads north.
On Monday, the NHC already said the storm
would
develop into a hurricane, but its
forecasted trajectory then was to hit central
parts of Louisiana – including New Orleans –
but not the industrious western part of the
state.
Louisiana has declared a state of emergency;
the state has just commemorated the 19th
anniversary of Hurricane Katrina, which brought
havoc to New Orleans’ outer and poorer suburbs
from which many are still recovering.
If the current, Tuesday morning forecast holds,
key petrochemicals-heavy municipalities in
Louisiana such Plaquemine, Geismar, Baton
Rouge, and Taft, among others, could be hit by
Francine’s gusts.
Companies such as Methanex or CF Industries,
with production facilities in the areas, had
not responded to a request for comment about
their hurricane preparations at the time of
writing.
“Francine is moving toward the north-northeast
near 8 mph (13 km/h). A turn to the
northeast with an increase in forward speed is
expected later today or tonight. On the
forecast track, Francine is anticipated to be
just offshore of the coasts of northeastern
Mexico and southern Texas through this
[Tuesday] afternoon, and then move across the
northwestern Gulf of Mexico, making landfall in
Louisiana on Wednesday,” said the NHC.
“After landfall, the center is expected to move
into Mississippi on Wednesday night or
Thursday. Maximum sustained winds are near 65
mph (100 km/h) with higher gusts. Strengthening
is expected through Wednesday morning, and
Francine will likely become a hurricane later
today or tonight [Tuesday]. Francine is
expected to weaken quickly after landfall.”
CHEMICALS, OIL,
GASLouisiana is home to many
large petrochemical hubs that produce
polyolefins, polyvinyl chloride (PVC), caustic
soda, ethylene oxide (EO), ethylene glycol
(EG), isocyanates, polyols, and ammonia among
many others. The state has numerous refineries.
Several offshore oil wells are off of the coast
of Louisiana. Companies will often evacuate
them and shut-in oil wells – majors such as
Shell or ExxonMobil have announced so.
The Gulf of Mexico accounts for about 14% of
total US crude production and 5% of dry gas
production, according to the country’s Energy
Information Administration (EIA).
The state is home to the Louisiana Offshore Oil
Port (LOOP), the only deepwater oil port in the
US.
If the port shuts down, then the US would lose
an important outlet for oil exports. That could
offset some of the shut-in wells.
Louisiana is also home to two large terminals
that export liquefied natural gas (LNG) in the
western part of the state. Sabine Pass LNG is
in Sabine, Louisiana, and Cameron LNG is in
Hackberry, Louisiana.
Any shutdowns could affect domestic natural gas
markets if the terminals spend too much time
offline.
Domestic gas supplies could build up, causing
local prices to fall. Prices for ethane, the
predominant feedstock for ethylene production,
typically follow those for natural gas.
Ethane prices could fall further if Francine
disrupts operations at any of the crackers in
Louisiana.
LOUISIANA VS TEXAS
IMPACTResidents of the Gulf
Coast, from Mexico’s Yucatan peninsula to the
US’ state of Alabama, are well accustomed to
living with extreme weather events.
In times of storms and hurricanes, many turn to
specialized sites such as Space City Weather,
which on Tuesday did not seem too worried for
the fate of Texas – more so about Louisiana’s.
Space City Weather’s main analyst,
Houston-based Eric Berger, reiterated on
Tuesday the hurricane will be “no joke” in
Louisiana, even if for many Texans it will have
looked like more like “a regular late” summer
day.
“The tropical system will remain well offshore
from Texas, and effects for most of our area
will be minimal. In fact, I would go so far as
to say that by tomorrow [Wednesday] people in
Houston will be going, ‘Hurricane? What
hurricane. This was a joke.’ Well, people who
didn’t know better will be thinking that at
least — but not readers of this site,” said
Berger.
“Francine will not be a joke for southern
Louisiana. The tropical storm has sustained
winds of 65 mph and is likely to move inland
Wednesday afternoon or evening as a Category 2
hurricane. The state’s most populated area,
from Baton Rouge to New Orleans, will be
directly impacted with winds, rains and storm
surge.”
The analyst concluded saying that for the most
part Houstonians will not be able to tell a
hurricane is passing offshore on Tuesday and
Wednesday.
“Skies will be mostly cloudy, with highs in the
mid-80s [degrees Fahrenheit, around 29°C],
which is cooler than normal for this time of
year,” said Berger.
“Perhaps that’s our greatest takeaway from this
storm, some slightly cooler days. I’m not
complaining.”
Source: US National
Hurricane Center
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