Pressure Mounts on European Petchems

As the wave of new capacity comes on line, pressure is mounting on petrochemicals producers in Europe.

Just taking ethylene capacity as an indicator, almost 7 million tonnes new capacity started up in 2009, another 7 million tonnes is due to come on-stream in 2010 and a further 5.5 million tonnes in 2011. Almost all of this new capacity is in the Middle East and Asia.

With the construction sector is still relatively weak and the automotive sector potentially at a turning point, given the withdrawal of economic stimulus initiatives, producers have increasingly relied on growth in Asian markets to fill the demand gap.

However there is little doubt that steadily increasing volumes of ethylene and derivatives will be arriving in Europe, increasing the pressure on producers. All have been through major cost cutting programmes over the last couple of years and have little room for further manoeuvre in this regard.

As a consequence, further capacity reduction is almost inevitable. However against a difficult political backdrop, as demostrated by recent strikes in France related to refinery closures, it is very difficult to predict just where this will happen.

5 Years On Since Texas City - CSB Statement

photo : CSB

March 23rd marked exactly 5 years since the Texas City disaster, a tragedy that resulted in 15 deaths, 170 injuries and a huge financial cost for the owner, BP.

A lot has happened in that time; there has been much wider recognition of the need for effective Process Safety Management (PSM) and many companies have implemented or are in the process of implementing very strong PSM policies and procedures.

However, there are still many companies that are not doing as much as they should in this regard. This is clearly a major concern. As a regular reader of the trade press, I see details of incidents and fatalities on a depressingly regular basis. This really should not be the case.

The Chairman of the US Chemical Safety Board (CSB), John Bresland has issued a statement regarding the incident and its impact on the industry. His final paragraph is a very succinct reminder for all of us in the industry

"When will we know whether the tragedy of 2005 has resulted in greater safety at BP and other companies’ refineries? Only when we can look back over the passing of a significant number of years without major accidents, deaths, or injuries. In the meantime, only the highest commitment to running down the even smallest of problems and upsets will assure the prevention of so-called low probability, high-consequence events like the tragedy that took so many lives in Texas City five years ago today."

Lotte Chemical UK - Update

According to press reports, the Wilton PTA plant will now restart on 15th April. The blog wishes very good luck to Lotte Chemical and its staff at Wilton.

Illinois Resolution Ask Congress to Postpone EPA Regulations on Emissions

photo : theage.com.au

Back in December, this blog discussed the recent proposed changes to emissions regulations announced by the US Environmental Protection Agency (EPA). The EPA, in announcing the“endangerment finding", classisfied CO2 and other greenhouse gases as "atmospheric pollutants", allowing it to regulate such emissions under the existing authority granted by the Clean Air Act.

The move has enraged US industry, who believe that the ruling puts at risk US jobs and the US economy.

This week, the Illinois House of Representatives passed a resolution encouraging “the Congress of the United States to adopt legislation that would postpone the US EPA’s effort to regulate greenhouse gas emissions from stationary sources using existing Clean Air Act authority until Congress adopts a balanced approach to address climate and energy supply issues without crippling the economy.”

In a related statement, the President of the American Chemistry Council, Cal Dooley, made the following comment on the issue "Congress and the Administration must act immediately to postpone EPA stationary source regulation that could have far-reaching consequences for economic recovery, job creation and energy efficiency".

Pressure is steadily mounting on the EPA, who, thus far, as resisting pressure to make changes to the proposal.

This blog's view is that issues as important as this are vital to the industry. A balanced and global approach is required to addressing climate concerns. Localised initiatives cause localised damage to industry and employment, they ultimately lead to carbon leakage and do not end up benefitting anyone.

UK PTA Plant Set to Restart

photo : El Economista

Following numerous posts about site closure, I'm delighted to post an article about a plant restart. Back in July last year, this blog reported the closure of the La Seda PTA/PTA plant at Wilton, UK.

The company Lotte Chemical UK Ltd., a part of the wider Lotte Group recently bought the Wilton Plant for 26 Billion Korean Won (US$22.4 mln). The Wilton plant has capacity to produce 500,000 tpa of purified terephthalic acid and 150,000 tpa of polyethylene terephthalate.

The Lotte Group's goal is "to be come a group that is appreciated by even one more person and to produce products that are loved by as many people as possible" - I'm sure that the company is appreciated by quite a few people on Teesside just now!

Shale Gas Again in the News

photo : Energy Tribune

The subject of shale gas has been very much in the news in recent days.

According to reports, Shell and PetroChina have offered $2.96BN for Australian unconventional gas producer Arrow Energy.

This deal would help meet China's energy needs and would provide additional feedstock for Shell’s proposed 16m t/y LNG production plant at Gladstone port in Queensland.

In the USA, the subject of Shale gas has dominated the CERA Week 2010 Energy Conference in Houston. Keynote speakers from both BP and Chevron have stressed the importance of shale gas to US energy supply, whilst the Energy Secretary, Stephen Chu, asserted his view that natural gas should be seen as a transition fuel, helping the world to achieve a shift towards green forms of energy.

This blog's view is that energy supply and energy security will rise up the agenda in the not too distant future. Many countries (such as the UK) potentially face significant energy shortfalls related to proposed closures of existing generating capacity. A move towards green and sustainable forms of energy will help the energy mix but gas will play an essential part in a secure energy future, both in the transition and in the longer term. The fact that so much activity is taking place in relation to shale gas shows that much of industry shares this view.

Chemical Release at UK Plant Injures Four

photo : http://www.hull.ac.uk/

FOUR workers were hurt last week, one very seriously, following a serious leak of titanium tetrachloride (TiCl4) from the Cristal Global titanium dioxide plant near Grimsby, UK.

The workers suffered burns and toxic inhalation injuries when up to two tonnes of titanium tetrachloride were released at the site, following the rupture of a pressurised container. The company has indicated that the site will remain closed until it was satisfied it was safe to restart operations.
 
The causes of the incident are not yet known and the investigation is on-going. Staff from the UK Health and Safety Executive have been present at the site over the weekend.
According to reports, the company has previously been prosecuted for releasing titanium tetrachloride to the atmosphere in 2006.
 
The site was severely impacted by the recession during 2009, with a number of production slowdowns and a extended shutdown due to the drop in demand for construction related products.
 
This incident was very serious and could have resulted in multiple fatalities. Thankfully this wasn't the case but is still vital that all of the root causes are fully understood and issues rectified before the facility restarts.