US Gulf Coast petchems monitor winter forecasts, expect minimal impacts for now

HOUSTON (ICIS)–The US Gulf Coast chemical industry is bracing for arctic weather forecasted for early next week, but effects on plants and operations are not expected to be catastrophic like winter storm Uri three years ago.

The National Weather Service (NWS) is forecasting extremely cold temperatures starting Sunday night, with a chance of rain on holiday Monday before dropping to 22°F (-5.5°C) Monday night and Tuesday night.

Most US Gulf Coast plants are prepared, and many have done capital expenditures (steam tracing, heat blankets, etc) to be able to handle and run during freezing weather, said Brian Pruett, senior vice president, polyethylene (PE), at ICIS.

“All bets are off if the natural gas or electricity supply is shut off due to a freeze from either direct impact or related-facilities or too many end-users pulling on the grid,” Pruett said.

The Electric Reliability Council of Texas (ERCOT), which operates the majority of the state’s electric service, said it is not currently expecting an energy emergency.

“ERCOT continues to closely monitor the winter weather moving in over the weekend and will deploy all available tools to reliably manage the grid,” it said. “At this time, grid conditions are expected to be normal.”

Some producers may shut down ahead of severe weather to prevent damage to assets, although no plants have shut down or reduced operations as of publication time on Friday.

“This freeze is not prolonged, and with Uri, it was not so much the plants having issues running in the cold. It was being forced down hard instead of methodically shutting down in preparation as the energy grid failed, making it far more devastating for the industry to recover,” said Kelly Coutu, director of vinyls, Americas, at ICIS.

Many US markets, such as vinyls and monoethylene glycol (MEG) are facing long supply and low margins because of poor demand.

“Question is will it be enough to address the build in inventory for a lackluster market – probably not if it is only a week,” Coutu said.

Ports of Houston and Freeport are not closed, but the Brazos Pilots have paused vessel loading because of the high winds and expect to resume later on Friday.

At Port Houston, two container ships retreated because of having a large sail area (stacked containers that would act as sails in the wind), and so far, are the only two ships impacted.

Houston Pilots said they are operating on a case-by-case basis.

Additional reporting by Adam Yanelli, Melissa Wheeler, Bruno Menini and Bill Bowen

Thumbnail shows ice and snow covering a Houston sign during Winter Storm Uri in 2021. Photo by David J Phillip/AP/Shutterstock