Explosion at Westlake Louisiana Plant May Delay Operations, Ethylene Prices to Surge

An explosion at the ethylene plant of the USA’s leading polymers and plastic manufacturer, Westlake Chemical, was reported on Monday at 11 pm. The reason for the explosion is being associated with a flash fire at the operation site, however, the exact cause for the accident is under investigation. The accident caused injuries to 5 people who were immediately hospitalized.

The ethylene plant, where the accident happened, is located at Petro Complex2 Unit at Sulphur, Louisiana and had been off-stream due to a scheduled turnaround. The injured people were contractual employees who were serving plant maintenance duties. Tuesday morning updates confirmed that the fire was soon extinguished and there were no fatalities at the accident site or among local residents.

Westlake operates a large production facility at the Louisiana site that has an ethylene unit each at Petro Complex1 and Petro Complex2 with an annual production capacity of 104 kilotons and 115 kilotons, respectively.

Ethylene is an extremely important industrial chemical produced from the high-temperature cracking of natural gas or petroleum feedstocks. Ethylene serves as a building block for the proliferating plastic industry as it is a key component for the production of downstream products like polyethylene, poly vinyl chloride and polyethylene terephthalate. It is also used as a raw material for forming ethylene glycol used in automobile antifreeze, paints etc., and in polystyrene that is used in rubber manufacturing industries.

As per ChemAnalyst, the heavy usage of ethylene in the end-user industries drives its huge demand which is expected to stay up with a CAGR of over 6%. The Louisiana plant had already been shut due to a planned turnaround, now with the recent fire accident, the manufacturing unit is expected to experience a longer duration of the outage. This is going to put huge pressure on the USA’s ethylene market from the supply side. Many downstream productions are also expected to suffer. The prices of ethylene which have already been a victim of fluctuating upstream crude values in the past few months may take an upward trend for a while. The damages and halts in plant operations may negatively impact Westlake Chemical annual profits.