Texas BD explosion to have 'nominal impact' on market

Port Neches, Texas – A fire that broke out following a pair of explosions at a TPC Group butadiene extraction facility in Port Neches has been extinguished, but the impact on the surrounding community and the butadiene market overall still is being assessed.

In the wake of the 27 Nov blast, two of the facility's distillation towers fell and more are likely to have been affected, according to Bill Hyde, executive director of olefins and elastomers at IHS Markit.

Hyde expects the Port Neches plant, which has an annual butadiene extraction capacity of 426 kilotonnes per annum (ktpa), to be closed throughout 2020, and most likely beyond. 

That facility, he noted, accounts for 17% of US butadiene capacity.

TPC Group Chief Executive Edward Dineen told the 175 employees at Port Neches on 30 Nov that they would be paid until the end of the year, when the facility will be closed indefinitely.

Hyde said the explosion's impact on TPC will be “devastating”, but believes the short-term impact on the total butadiene market will be nominal, namely because butadiene facilities in the US are running at a capacity rate of about 60%.

"I've spoken with a number of customers, and they tell me that butadiene inventories are high, while demand is relatively low," he said. "In a steady state, with everything running normally, it looks like this is manageable."

On the other hand, another major break in the butadiene supply system could mean trouble, because the built-in capacity excess the industry has had for years is gone, Hyde said.

The TPC fire began after two explosions at the facility on 27 Nov. Two Port Neches employees and a contractor were injured and an estimated 60,000 people were evacuated from communities surrounding the plant.