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

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.

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.

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.

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

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.

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.

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.”

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