* Williams Olefins resumes ethylene for sales production
* Evangeline repairs continue
* Chevron Phillips begins startup at Texas plant
US spot ethylene was at a 53-month low Tuesday after declining 1.25 cents to be assessed at 34.5-35 cents/lb FD USG for February delivery, while the March assessment was down 0.75 cent at 35-35.5 cents/lb FD USG following market following talks of restarts at two major producers.
Tuesday’s front-month spot assessment is the lowest since September 27, 2010, when the ethylene assessment was 34.125 cents/lb FD USG, Platts data showed.
The assessment is now 41.5 cents below the highest level on record, seen September 19 at 76.25 cents/lb FD USG, Platts data showed.
The dip in pricing followed the long-anticipated morning announcement from Williams Partners to resume ethylene sales from its expanded Geismar, Louisiana, olefins plant after successful commissioning of the rebuilt and expanded projects.
Additionally, Chevron Phillips is restarting a steam cracker at its Cedar Bayou, Texas, plant, according to a company filing with state regulators on Tuesday.
The estimated completion of the excess emissions associated with startup of the 830,000 mt/year steam cracker was to be by March 10, Chevron Phillips said in today’s filing with the Texas Commission on Environmental Quality.
One market source estimated the startup completion in the 7-10 day range.
According to sources, Williams has yet to provide initial sales volumes and allocations.
The expanded ethylene capacity of the Geismar site is 885,000 mt/year, the company said.
Before the June 13, 2013, explosion and subsequent fire, the plant’s ethylene and propylene production capacity were pegged at 590,000 mt/year and 40,000 mt/year, respectively
The most recent decline in prices began in the beginning of the year and received support from logistical constraints connecting Texas and Louisiana.
An inspection tool was stuck in early January at Boardwalk’s Evangeline Ethylene Pipeline System.
The Evangeline system, which Chevron Pipe Line sold to Boardwalk Pipeline Partners for $295 million in early October, is a 176-mile interstate pipeline that can move 2.6 billion lb/year of ethylene and is supported by long-term, fee-based contracts, Boardwalk said on its website.
Three Texas-based producers are currently undergoing turnarounds that are to be completed in February, sources said — ExxonMobil in Beaumont (820,000 mt/year capacity), Dow Chemical’s LHC#8 in Freeport (1 million mt/year) and Shell OP3 in Deer Park (834,000 mt/year, though it is running at reduced rates) — which could lead to lower spot prices and contract prices in February.
The late-September slide in ethylene followed the startup of LyondellBasell’s 800 million lb/year expansion of its steam cracker in La Porte, Texas, to 2.55 billion lb/year.
In addition, Chevron Phillips Chemical and Williams Partners said in December they have completed capacity expansions and are undergoing startups at their respective plants in Texas and Louisiana.
CP Chem has expanded the ethylene production capacity of its Sweeny No. 33 by 200 million lb/year to 2.255 billion lb/year.
In markets, February was last heard in the bid-offer range of 34-35.75 cents/lb MtB Wms, while March was heard bid at 35 cents/lb MtB Wms and offered at 42.5 cents/lb Choctaw.
February was last heard traded at 34.75 cents/lb MtB Wms, following five deals heard throughout the day in the range of 34.75-35 cents/lb MtB Wms.
– Platts.com
