Dateline: October 18, 2005

Chemical Industy News from the U.S.
Chemical Industry News from India
Technically Speaking

Chemical Industry News from the U.S.

Explosion and fire
At least five people were injured in an explosion and fire at a Formosa Plastics chemical complex in Point Comfort, Texas.  Two men were airlifted by helicopter, one in serious condition with burns to 36% of his body and the other in fair condition with burns to 5% of his body.  The other three people received minor injuries.  The explosion took place at the complex's Olefins 2 propylene line.  The fire affected about 200,000 tons/year of propylene and 830,000 tons/year of ethylene.

Fire hit styrene production
Sterling Chemicals Inc. incurred between $5 million and $10 million of property damage at its Texas City, Texas styrene production facilities when a fire ravaged the south train superheater while the entire plant was shut down in anticipation of Hurricane Rita.  The north train was not affected and is operating at normal rates.  Damage is still be assessed, but Sterling expects the repairs to be complete in the next four to six months, thereby resuming styrene production at normal levels.

Plant closing
BASF will close its Carrollton, Texas polyurethane systems production facility by the middle of 2006.  This closure is part of the company's North America restructuring program.  Production at the site will be consolidated into other BASF polyurethane systems in the USA.  Approximately 15 jobs are affected by this closure.

Plant repairs
Chemtrade Logistics Income Fund has begun repairs to the ancillary damage caused at its Beaumont, Texas chemical plant by Hurricane Rita.  Repairs should take only a few days since the plant sustained only minimal damage from the storm.

Operations resumed
Lyondell Chemical Company has resumed operations at all of its Texas Gulf Coast ethylene, propylene oxide (except the Bayport, Texas unit) and refining facilities that had been shut down due to Hurricane Katrina.  In addition, Lyondell has started up the majority of its derivatives facilities.

Bleach capacity boost
Olin Chlor Alkali Products, a division of Olin Corp., plans to double sodium hypochlorite production capacity at each of its four U.S. manufacturing sites.  Plans for the expansion include the addition of specialized blending and filtration equipment to produce custom bleach while maintaining high-purity specifications.  Customization options will include various strength and alkalinity levels.  The expansion should only require a minimal capital investment since most of the equipment is already in place from existing operations.  Engineering studies are underway at Olin's plans in Georgia, Tennessee, Alabama and New York to expand bleach production in time for next summer's peak.

More natural gas legislation under consideration
The U.S. House Energy & Commerce Committee will launch a series of hearings on securing natural gas and other energy supplies.  The successive hearings will be aimed at addressing the nation's energy infrastructure needs in the wake of Hurricanes Katrina and Rita.  The Committee Chairman Joe Barton said there is a need for further legislation to meet the energy demands required for rebuilding and expanding electric, natural gas and oil production facilities and to ensure continuing access to water.

Investment in ethanol
New Energy Capitol Corp. is investing approximately $86 million in a new 55 million gallon/year ethanol production facility currently under construction in Albion, Michigan.  The plant is adjacent to a grain terminal owned by The Andersons Inc.  Andersons will manage the plant, which is expected to be complete by September 2006.

New plastic additive
Ciba Specialty Chemicals has introduced Irgasurf SR 100, a new plastic additive that boosts the scratch resistance of automotive polypropylene/thermoplastic olefin (PP/TPO) compounds.  Applications for this new additive include instrument panels, door panels and pillars, as well as exterior parts, including bumper fascia or side trim.

Production phase out
Wyeth will phase out manufacturing operations at its Rouses Point, New York facility, a major production site for Premarin (conjugated estrogens).  Contributing to this phase out are significant reductions in overall sales volume of Premarin, which has affected the site's long-term viability.  All operations will stop by late 2008.  Workforce reductions will begin in 2006 and extend through the next three years.  Wyeth is exploring options to sell the site.

The government gets the blame
Major U.S. gas utility companies said that chemical plant shutdowns, job losses and sharply higher consumer energy costs are the result of the government's failure to open more U.S. territory to natural gas production.  Roger Cooper, American Gas Association's executive vice president, said that the government has not been as responsive to industry requests to open new areas and that everyone is paying the price now for those policies.  With warnings that U.S. natural gas prices are likely to be 50% to 70% higher during the coming winter than they were last year, the American Gas Association called on Congress to move quickly to allow natural gas development and production in the eastern Gulf of Mexico and on the outer continental shelf regions of the U.S. East and West Coasts.  In addition, it called for a substantial increase in federal funding to support the home heating costs of the poor.  The group is encouraged that now, as a result of Hurricanes Katrina and Rita, that there may be a greater possibility for the legislation to support its requests.
 

Chemical Industry News from India

Investment in expansions
Reliance Industries Ltd. will invest $1.6 billion to raise its total petrochemicals and plastics production capacity from 12.5 million metric tons/year to 15 million tons/year between 2006 and 2009.  Polypropylene production will be boosted from 1.4 million tons to 1.7 million tons; paraxylene from 1.6 million tons to 1.9 million tons; purified terephthalic acid from 1.3 million tons to 1.9 million tons; partially oriented yarn from 550,000 tons to 870,000 tons; and polyester staple fiber from 570,000 tons to 800,000 tons.  Reliance is India's largest publicly traded company and it expects operating rates and margins around the globe to remain firm until 2008.

Leather chemical unit possibility 
Balmer Lawrie & Company is contemplating setting up a state-of-the-art leather chemical plant in West Bengal.  The project is a part of the company's draft strategic plan for the next five years.  The company currently has a leather chemical plant in Chennai and is considering a second plant as it is a market leader in this area.  In addition, the company may also diversify into construction chemicals.

LNG to be used for expansion
Krishak Bharati Co-operative Ltd. will use LNG along with the Bombay High natural gas received from GAIL as fuel for its capacity expansion project at Hazria.  The Rs. 1,750-crore Hazira expansion project is awaiting approval from the Cabinet Committee of Economic Affairs.  The expansion will add 3,250 tons/day of new urea capacity to Kribhco's existing capacity of 3,200 tons/day.  Kribhco currently receives 3.6-mmscmd of natural gas for its ammonia manufacturing operations - for the expansion, it would require an additional 2-mmscmd of gas, the bulk of which would be sourced as LNG.

Raising funds for a power plant
Phillips Carbon Black Ltd. is studying several options for raising approximately Rs. 35-40 crores for its proposed 30 mega-watt power plant  contiguous to its factory at Durgapur in West Bengal.  The total cost of the project is estimated at Rs. 110 crores, with 35-40 crores as equity and the rest debt.  The two options for raising the funds include either a preferential allotment or a private placement or a foreign currency convertible bond of approximately $8 million to $10 million.

Expansion investment
Sun Biotechnology Ltd. will invest about Rs. 60-crore to set up another biotechnology unit in Hyderabad or Kolkata.  The company currently operates one biotechnology unit at Kolkata that produces industrial enzymes and bio-pesticides.  The proposed new unit would begin operations in 2006 or 2007, allowing the company to produce more upgraded and other new products in biotechnology. 

Technically Speaking

When is it necessary to use a pump that complies with API-610?

The American Petroleum Institute has standards for pumps that generally apply to a service for toxic, flammable, or explosion-prone services where one or more of the following conditions are expected:

A.  Head exceeds 350 ft (106.6 m)
B.  Temperature of fluid exceeds 300 °F (149 °C) on pumps with discharge flanges larger than 4 in. or 350 °F (177 °C) on pumps with 4 in. or smaller discharge flanges.
C.  Driver horsepower exceeds 100 hp (74 kW)
D.  Suction pressure is in excess of 75 psig (516 kPa)
E.  Rated flow exceeds flow at best efficiency point (BEP)
F.  Pump speeds in excess of 3,600 rpm.

While these are not "hard and fast" rules, they are used as guidelines.

Reference: Improving Machinery Reliability, Gulf Publishing, ISBN 0884156613