29 Jan 2015, 7.20 pm GMT
29 January (Argus) — Shell said today it expects the 900,000 t/yr ethylene steam cracker at Moerdijk in the Netherlands to be back in operation by year-end.
The shutdown, which had a major impact on chemical earnings in the fourth quarter, was initially estimated to last until the end of the third quarter.
The cracker was shut down in October following a steam leak. Derivative units for production of styrene monomer, propylene oxide and ethylene oxide have already restarted using feedstock from other sources.
Shell recently entered into a commercial agreement with Versalis, a unit of Italy's Eni, to restart its 500,000 t/yr Porto Marghera cracker in Italy to partially cover the lost volume. No further details of the agreement were given, but observers expect the Italian cracker could restart as early as February, shipping ethylene and propylene to Shell and its customers in northwest Europe.
The Moerdijk shutdowns are unprecedented in Shell's recent history. The company's chemical plant availability was just 65pc in the fourth quarter, the lowest in any quarter since at least 2007, and well below the next lowest figure of 86pc which occurred in the aftermath of the financial crisis in the third quarter of 2008. For the full year, availability fell to 85pc from 92pc in 2013. With the Moerdijk cracker out for most of the year, Shell predicts an 80pc availability for 2015.
The impact on sales and earnings was severe. Fourth quarter chemical earnings on current cost of supply basis fell by 72pc year on year to $98mn. Chemical sales fell by 12pc on a quarterly basis and by 2pc for the full year.
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