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Supply issues impact Chevron Phillips and Formosa polyethylene plants

By: Frank Esposito

May 15, 2013

AKRON, OHIO — Production and supply issues continue to impact polyethylene plants operated by Formosa Plastics Corp. USA and Chevron Phillips Chemical Co. in Texas.

Officials with Livingston, N.J.-based Formosa confirmed on May 15 the restart of two of three high density PE lines that had been down since a May 2 fire at its plant in Point Comfort, Texas. Those lines represent about 70 percent of the unit's output, they added.

The third line is expected to be up and running in late June, officials said. Two workers remain hospitalized — both contract workers — from injuries sustained in the fire. Force majeure conditions remain in place for high molecular-weight bimodal grades of Formosa's Formolene-brand HDPE.

"The quantity of product that will be allocated for the month of June is under evaluation," polyolefins vice president and general manager Ken Mounger said in a May 14 letter to customers. "We understand the burden that this ongoing production interruption has placed on [customers]. Formosa is making every effort to return to normal operations as soon as possible."

But just as Formosa was bringing some of its PE capacity back, Chevron Phillips Chemical Co. — based in The Woodlands, Texas — was declaring force majeure on PE because of a minor emissions event at its Cedar Bayou plant in Baytown, Texas.

According to a report filed with the Texas Commission on Environmental Quality (TCEQ), more than 260 pounds of hexene, almost 150 pounds of pentane and three pounds of gaseous ethylene were released from the plant between 11:30 p.m. on May 9 and 3 a.m. on May 10.

The cause of the air emissions event was listed as an incinerator shutdown, which resulted in process degasser streams being routed from the incinerator to the atmosphere.

The PE force majeure was confirmed in a May 14 customer letter obtained by Plastics News. In the letter, Chevron Phillips PE vice president David Morgan said that the firm "has experienced a contingency event and is in a force majeure situation with respect to [Chevron Phillips'] polyethylene supply."

Chevron Phillips "will work diligently to minimize the impact of this event on your business and return to full polyethylene deliveries as soon as possible." Officials with the firm declined to comment on the TCEQ filing.

Chevron Phillips ranks as one of North America's largest HDPE makers with annual capacity estimated at almost 3.5 billion pounds. The firm also operates almost 1.9 billion pounds of linear low density PE capacity and 620 million pounds of annual capacity for low density PE. In addition to Baytown, Chevron Phillips also makes PE at plants in Pasadena and Orange, Texas.