By: Frank Esposito
June 13, 2013
Two workers were killed and 76 others were injured in a June 13 explosion at a plastic feedstocks plant operated by Williams Cos. Inc. in Geismar, La.
Officials with Tulsa, Okla.-based Williams identified the fatalities as operations supervisor Scott Thrower, 47, and operator Zachary Green, 29. Thrower had worked for Williams since 1999, while Green joined the company in October.
Most of those injured have been treated and released from area hospitals. Five workers remained hospitalized as of June 14, according to a company news release. Many of the injured were treated for burns, cardiac and respiratory issues and blunt trauma, according to Christina Stephens, communications director with the Louisiana Department of Health and Hospitals. More than 300 workers were evacuated from the site.
In news releases, Williams President and CEO Alan Armstrong said the firm and its employees are grieving for those killed and "remain deeply concerned about Williams' personnel and contractors who sustained injuries, some quite serious."
The blast occurred shortly after 8:30 a.m. at the plant, which makes both ethylene and propylene monomers. The fire caused by the blast was extinguished later that day. Williams officials said the firm is cooperating with federal, state and local agencies in assessing the situation and determining the cause of the explosion. They added that the extent of damage is unknown.
Officials had said in an earlier release that emergency shut-down valves had been closed at the plant and that the unit where the explosion occurred has been isolated. They could not be reached for further comment on June 14.
Officials with the Louisiana Department of Environmental Quality and the Environmental Protection Agency have been monitoring the site. No detection of hazardous materials above normal levels had been detected as of June 13, officials said in a news release from the office of Louisiana Gov. Bobby Jindal.
Jindal visited the site and met with first responders and local officials.
"We want to thank the brave work of our first responders who ran toward danger, instead of away from it, to help evacuate folks," Jindal said in the release.
The plant has annual capacity of almost 1.4 billion pounds of ethylene and 90 million pounds of propylene. Williams, which ranks as one of the United States' 10 largest natural gas suppliers, was in the process of expanding the Geismar site.
The explosion and subsequent outage is likely to have an impact on the North American polyethylene market. News of the explosion caused spot ethylene prices to jump more than 5 cents per pound June 13, according to David Barry, a market analyst with the PetroChem Wire consulting firm in Houston.
Barry added that although it's not yet clear how much the Williams explosion "will alter the trajectory" of the PE market, he thinks that "it's a good bet that this will put the brakes on any price slippage."
Regional PE prices have climbed about 10 percent so far in 2013, based on prices for dairy blow molding grades of high density PE on the Plastics News resin pricing chart. Market watchers had expected prices to fall in May, but they remained flat, due in part to production outages at Gulf Coast plants operated by Formosa Plastics Corp. USA and Chevron Phillips Chemical Co. LLC.
The Formosa outage was caused by a May 2 fire in an ethylene unit at the firm's complex in Point Comfort, Texas. Fourteen workers were injured in that event.
The Williams plant in Geismar accounts for about 2.5 percent of North American ethylene capacity, according to Robert Bauman, president of Polymer Consulting International Inc. consulting firm in Spring, Texas. Although that amount is relatively small, Bauman said 5 percent of the region's capacity already was off line because of a number of planned shutdowns.
"The key issue is how much of [ethylene made in Geismar] was being sold to polyethylene producers compared to producers of other derivatives," Bauman said. "The companies that have lost the ethylene from this plant will try to buy ethylene in an already tight market."
"So while the percentage may be small, the impact could be greater than it would seem as the spot market is much, much smaller than the contract market," he added. "If [PE] exports are reduced ... the impact may not be that great, but the most likely impact will be higher [PE] prices."
The Williams outage "occurred at a particularly bad time for PE consumers," according to Phil Karig, managing director with Mathelin Bay Associates LLC consulting firm in St. Louis.
"Just as it looked as if there would be some relief from recent planned and unplanned ethylene outages, we have a serious outage at Williams that, if the initial reports are correct, is not likely to be corrected anytime soon," Karig said.
Mike Burns, a market analyst with Resin Technology Inc. in Fort Worth, Texas, added that although the Williams incident "will be a big discussion point" between PE buyers and suppliers, low PE inventory levels likely will be more of a driver in the current market.