The flames that lit up the night sky at Plaquemine, Louisiana, on July 14, 2023, have died, the fire associated with an explosion at the site has been extinguished, and the workweek began with more questions than answers.
What we know (and knew from weekend television news reports and the company’s communications) is that the unit at the center of the situation is Dow's Glycol 2 unit, which produced ethylene oxide (EO). It is one of two EO/EG lines at Dow's Plaquemine complex; both lines are understood to now focus on EO. It receives its major raw material, ethylene, from Dow's olefins plants at the site.
While the incident is being investigated, no estimates of how long the plant will be shut have been disclosed. In a social media posting on July 16, Dow Louisiana Operations said the fire did not affect other operations at the site.
The company said it will begin a review to determine the cause of the incident and promised to provide more information about "the products involved, the impact on operations and next steps when it is available."
That said, Dow declared Force Majeure on EO the morning of July 18, which will affect not only the ethylene oxide markets but also downstream markets such as PEG (polyethylene glycol), E-series glycol ethers and ethanolamines.
The Plaquemine site covers 3,300 acres and includes 23 manufacturing plants, including two olefins units with annual ethylene production capacities of 1.245 billion lbs and 2.35 billion lbs, along with several polyethylene units that produce linear low-density polyethylene and low-density polyethylene grades.
The two EO-focused units at Plaquemine consume an estimated 233,000 metric tons per year of ethylene from the site's olefins plants. On a daily basis, this is a total of about 1.4 million pounds of ethylene. If only Glycol 2 is shut, this consumption figure is reduced by half.
No effect has been seen on pricing in any market so far. EO does not have an active spot market. As most EO derivative markets are facing a subdued demand this year, the impact on supply should not affect prices for some of those EO derivatives, except for halting the drop some of those markets are facing.