The reopening of Intercontinental Terminals Co. could end weeks of major disruption in the petrochemical supply chain with ripple effects for Louisiana, the Houston Chronicle reports.
According to the newspaper, the terminal, which has 242 tanks capable of storing 13 million barrels of products, is a major petrochemical hub, so its closure has created massive disruptions in supply for solvents, methanol and other chemicals across the Gulf Coast region.
The Deer Park site is significant for pricing and trading petrochemicals—much like the Henry Hub in Louisiana is for natural gas or the Cushing, Okla., hub is for oil. Dozens of companies ship methanol and other chemicals out of ITC’s docks every year. It is also a key storage point for companies such as the San Antonio refiner Valero Energy, the Texas oil major Exxon Mobil, the California oil major Chevron, and the Houston companies Citgo Petroleum, Phillips 66 and Tauber Petrochemical Co.
A March 17 chemical fire burned for three days, sending a thick plume of smoke over the city that elevated benzene levels, destroyed 11 storage tanks and released chemicals into the Houston Ship Channel. The company last week reopened most of its docks, with limited marine activity.
According to the Houston Chronicle, the terminal’s closure forced chemical buyers to find supplies of chemicals elsewhere—including Lake Charles—spurring major disruptions in markets for methanol and solvents used in paints, lacquers, thinners, glues, pesticides, nail polish removers and dozens of other products.
For Methanex, a Canadian company that stores and sells methanol out of ITC, the Deer Park terminal’s closure increased logistical costs because the company had to draw on supplies from Louisiana and Canada to fulfill customer’s contracts, CEO John Floren said last week in a first quarter earnings call. Floren said the fire caused a “big disruption” to supply chains and damaged the industry’s safety reputation.
The Houston Chronicle has the full story. (Subscription may be required.)