Formosa's new Texas cracker delayed, Braskem to pay town relocation, Port Houston works on expansion

News Briefs

Port Houston officials will work in 2020 to get federal approval for the Houston Ship Channel expansion. Photo courtesy of Port Houston.

Formosa to give status of new cracker, LDPE

Formosa Plastics didn´t start its new cracker Point Comfort, Texas nor its new low-density polyethylene production line in 2019, as had been anticipated.

 “We will be posting an update on the status of our expansion units by the end of January,” a Formosa spokesperson told Petrochemical Update by email on Jan. 13.

The new ethane cracker will have about 1.25 million tonnes of annual capacity. The low-density polyethylene plant will produce about 400,000 tonnes annually.

The Point Comfort site consists of 16 units and support facilities.

The site started with a VCM/PVC plant in 1983. In 1994 it added olefins, LLDPE, HDPE, PP, chlor-alkali, and ethylene dichloride.

In 1998, the site expanded with a second olefins plant, a second HDPE plant, a new specialty PVC plant and a second PP plant.

The ethane cracker and LDPE units to be started up are part of the most recent expansion that includes a third olefins unit, a PDH unit, an LDPE resin plant, another HDPE resin plant and an additional PP line.

Braskem to relocate town of 17,000

Braskem, Latin America´s biggest petrochemical company, agreed on Jan. 3 with the Brazilian Alagoas state to relocate 17,000 people now in at-risk areas near company property.

Braskem will give 1.7 billion reais (about $450 million) for the relocation. In addition, 1 billion reais would be used to close wells in this property in the Alagoas state, located on the Atlantic coast and about 1,100 miles northeast from Brasilia.

In return Alagoas authorities agreed to unblocking 3.7 billion reais in company funds that had been secured during litigation. Lawsuits started after officials blamed Braskem for causing fissures in roads and buildings that had begun to appear in February 2018.

Braskem said in November 2019 it planned to close the mine but that any cause-effect relationship between mine activity and the cracks on roads and homes was still under study. Results would only come in March 2020, it said.

Sasol’s Lake Charles cracker increases rates

Sasol said on Dec. 17 that its Louisiana Lake Charles Chemical Project (LCCP) ethane cracker was ramping up output after replacing the acetylene reactor catalyst.

The ethane cracker with 1.4 million tonnes annual capacity started operations in August.
However, it had only run at about 50% rates due to problems with the acetylene removal system but “this issue has now been resolved.”

Sasol also said that its planned low density polyethylene unit is being commissioned.

Chemical ´barometer´signals slow gains

The American Chemistry Council said on Dec. 24 that its Chemical Activity Barometer for November was revised upward by 0.2 points, and that for October up by 0.3 points.

This signals “slow gains in U.S. commerce into the third quarter of 2020,” said Kevin Swift, chief economist at the ACC.

The ACC saw “mixed” trends in construction-related resins, pigments and related chemistry as well as in packaging. Performance chemistry eased, reflecting weakness among industrial end-use markets.

U.S. truck tonnage index fell 3.5% in November

The adjusted for-hire truck tonnage index published by The American Trucking Association decreased 3.5% in November after falling 0.7% in October.

“It’s tough to sugar coat November’s reading,” said ATA Chief Economist Bob Costello.
It was the third decrease in the last four months. The index is down 7.2% since July. November was the first month to see a year-over-year drop since April 2017.

Motor carriers have in recent years collected nearly 80% of the total revenue earned by all the U.S. transport modes, the trucker association said.

Houston to push for channel expansion approval

Port of Houston officials plan multiple meetings in Washington, D.C. in the first quarter of 2020 to seek approvals needed “to widen and improve the busiest ship channel in the nation.”

The Port of Houston Authority said that the port commission during its last 2019 meeting in mid-December said that securing federal authorization for the Houston Ship Channel is now a primary focus.

The Port Commission authorized an additional $400,000 to support the channel expansion. This adds the $23 million already invested in the project.

“Business remains solid at Port Houston, with container volume expected to reach an all-time high of nearly three million TEU for 2019,” the port’s executive director, Roger Guenther, said.

North American rail traffic declines

The Association of American Railroads (AAR) said that during the week ended Jan. 4, 2020 the total U.S. weekly rail traffic was down 5% on-year.

Rails moved a total 414,014 carloads and intermodal units during that week.
Including Canada and Mexico, the total North American rail volume for the week ending Jan. 4, 2020 was 303,410 carloads, a 3.3% on-year decline. This includes reports from 12 railroads.

Carloads, which typically hold a single commodity, are used for most petrochemical shipping.

Braskem Idesa helps Mexican trade balance

Braskem Idesa, the Brazilian-Mexican venture in Veracruz, has produced three million tonnes of polyethylene since its mid-2016 startup until the end of 2019, a company official told a Mexican trade publication.

The estimated contribution to the Mexican trade balance in that time is a net $3.4 billion, Roberto Velasco, the company’s industrial director, told on Jan. 7 the Mexican publication Puertos, Transporte y Carga.

Company officias are looking into building an import terminal to solve a problem with local feedstock supplies.

By Petrochemical Update