Shell to Close Ethylene Capacity at Wesseling

photo : eagleburgmann.com

Shell has announced that it will close the 2B Rheinland cracker in Wesseling, Germany, by the end of 2011 and cease benzene and toluene production from the unit before the end of 2012.

So far, European ethylene production has been left relatively intact, given the difficulties associated with its import.

However with Ineos having recently signalled that it may build a 1m tonne ethylene terminal at Antwerp, which would give a significant extra input to the ARG network, together with the large increase in global capacity coming from start-ups in the Middle East and Asia, this situation is surely under threat.

Shell's announcement is not a major surprise, with the Wesseling cracker being relatively small and uncompetitive. It would not be a surprise if more such announcements were to follow in the not-too-distant future.


Typhoon Leads to Petrochemicals Shutdowns in Taiwan

photo : http://www.cdn.wn.com/

Chemicals manufacturers are very familiar with the need for comprehensive risk assessments and the implementation of appropriate mitigation measures. However, some events are beyond the wildest imagination of most manufacturers.

Producers in Taiwan have been forced to shutdown petrochemical facilities in Kaohsiung in southern Taiwan because of flooding caused by Typhoon Fanapi.

A report in John Richardson's 'Asian Chemical Connections Blog', published by ICIS, indicates that the flood waters reached a height of more than 100 centimetres in the petrochemical parks.

No doubt the plants will restart swiftly once the waters have receded but one can imagine significant damage to equipment (IP65 is a standard for most instrumentation but only gives protection against water spray and not total immersion) as well as the awful mess that will have to be cleared before things can return to normal.


Shale Gas Prospecting Moves to UK

photo : Shaun Dunmall (Flickr)

The race for shale gas continues to gather pace, with  reports of UK being one of the newest sites for exploration.

For the British, Blackpool is a traditional seaside town, with its iconic tower, donkey rides and amusement arcades on the famous 'Golden Mile'.

That reputation may be set to change however, if the company Cuadrilla Resources is able extract gas from the nearby Bowland shale. Cuadrilla is a new name in the industry but apparently is significantly backed by private equity.

There are some concerns about the extraction of shale gas. The US Environmental Protection Agency is currently investigating the potential problems associated with hydraulic fracturing and in particular the need for high volumes of water, together with the risk of contamination by the chemicals used in the fracking process.

For the UK, with a dwindling supply of gas coming from the North Sea and an increasing reliance on imports from countries such as Russia, the possible availability of shale gas is is potentially very good news. Apparently suitable geological conditions exist in much of the North West of England, North Wales and in the area around Oxford. If Cuadrilla achieve success, we may very well see many more companies joining the hunt.
Update - thanks to the reader for the following comment on shale gas prospects in the UK

"Boring Rock" - Prospects for Shale Gas in Britain provides the comments of Mike Stephenson of the British Geological Survey. The article can be read at http://www.naturalgasforeurope.com/


ICIS Publishes Top 100 Companies For 2009

ICIS has recently published its regular Top 100 Chemical Companies feature, together with an excellent analysis of the events of the last year.

The Top 5, ranked in terms of sales, are BASF, Dow Chemical, ExxonMobil, Sinopec and Lyondell Basell. Of these, Sinopec is new to the top 5, having been ranked 8th last year.

Looking back over the last year, it is really quite remarkable that the major chemical companies have fared so well in adapting to an economic crisis that saw an oil price crash from a peak of $147 per barrel down to $32 per barrel and a virtual collapse in markets such as construction and automotive.

Clearly survival required significant cost reduction across the board. Reduced working capital, operating and maintenance cost reductions and reduced capital expenditure were commonplace, the only difference being the depth of cuts from one company to the next.

This blog has talked much about a new normal in the post recession period. The challenge remains a difficult one for all chemicals producers as we move forward. It will be necessary to deal with the economic conditions that this new normal will bring, whilst also adopting strategies to address the impacts of the recent cost cuts in areas such as capital expenditure.

However, in having survived so far, companies have clearly demonstrated that they have the management capabilities and willingness to adapt.


Avoiding Software Downtime to Maximise OEE

I'm always happy to post relevant articles from readers of the blog. This piece by Tracy Barlow of 24/7 Uptime discusses how to maximise OEE by protecting critical software from downtime or loss.


Having recently read the Software Advice article “A Plain English Guide To Modern Manufacturing Methods” on International echem’s blog, there is something else to consider when looking to improve overall equipment efficiencies (OEE).

We all know that even a minute of downtime can mean lost productivity, lost profits, increased waste, compromised safety and damaged reputation. But whilst process automation solutions do much to accelerate, optimise and protect manufacturing processes, the software itself has to be protected from downtime or loss.

We researched the offerings available in this area and decided to work with a solution called everRun software from Marathon Technologies. everRun is a cost effective solution implemented on standard hardware/servers that keeps critical systems up and running upto 99.999% levels of availability.

Different systems do need different levels of protection because some are more business critical than others. However, continuous availability is becoming increasingly important to organisations. The application availability pyramid below shows the average yearly downtime suffered with different availability levels:

This technology protects environments by combining the components of two or more physical servers to ‘share’ components: hence faults such as disk array failure and/or loss of network card, etc, can be tolerated with zero impact on the processing environment. Even a full server failure is tolerated with zero downtime.

And this is how it does it:

Marathon everRun High Availability Diagram

I recently heard a very good summary description about this technology “From financial transaction systems at the New York Stock Exchange to pharmaceutical manufacturing companies, more than 3,500 customers worldwide use Marathon everRun to robustly protect their essential systems – and that’s a very high level of trust.”

Turbulent Times Continue for Chemicals Manufacturers

Having already withstood one of the worst recessions in living memory, chemicals manufacturers were very much hoping for some respite, as the world economies appeared to be pulling out of recession.

The summer break, however, has brought more suggestions of double-dip recession and with car sales and construction starts down, together with a likely slowdown in economic activity in China, we can foresee a difficult few months for the chemical industry. The 'new normal' as predicted by my colleague Paul Hodges, is very much with us.

So how do we cope with this 'new normal'. We've already had job cuts and, in many instances, significantly reduced levels of discretionary expenditure. So where next? It certainly isn't an easy question to answer and there isn't a one size-fits-all solution but I think that a very high level of challenge and focus is most important, in order to ensure that we are fully focussed on doing the right things

Here's a list of questions to challenge the management team of any chemicals manufacturer...

  • Do you have a highly capable manufacturing management team?
  • Does your team understand the challenges of the new normal?
  • Does the team understand the need for adaptability and flexibility?
  • Does the team know how to achieve this adaptability and flexibility?
  • Are management objectives aligned with these needs?
  • Have strategies been prepared for the challenges which may occur?
  • Are all of the operating and capital cost requirements fully understood?
  • Is there a relentless drive to improve cost effectiveness?
  • Does the management team understand fully the consequences of any decisions they make?
  • Do you know what your competition is doing to achieve success in the new ‘normal’?
  • Does your workforce have the right skill levels for the high level performance required under varying conditions?
  • Does your workforce understand the need for change?
  • Do you have appropriate agreements in place to give you the required levels of flexibility?
  • Are your workforce objectives and targets aligned with those of management and the organisation?