Huntsman says fire shuts Texas chemical plant
Mon May 1, 2006 2:23 PM ET
NEW YORK, May 1 (Reuters) - Huntsman Corp. said on Monday a major fire at its Port Arthur, Texas, chemicals plant over the weekend significantly damaged the facility, knocking it off-line for several months.
The facility, which accounts for about 30 percent of Huntsman's global ethylene capacity, carries a $10 million deductible for property damage insurance and business-interruption insurance that does not apply for the first 60 days of the interruption.
The fire began Saturday in the propylene refrigeration unit, according to Huntsman, whose 50 employees and contractors working at the plant were evacuated safely. None of Huntsman's other Jefferson County, Texas, sites were impacted and these plants remain operational.
A team of investigators from the U.S. Chemical Safety Board (CSB) will arrive at the site Tuesday, the board said.
The CSB is an independent federal agency charged with investigating industrial chemical accidents. It does not issue citations or fines, but does make safety recommendations to plants, industry, labor groups and regulatory agencies.
No injuries were reported, the board said.
The Port Arthur facility, also known as the Light Olefins Unit (LOU), has an annual production capacity of 1.4 billion pounds of ethylene, Huntsman said.
Ethylene is a key chemical used throughout the industry in the production of other chemicals and most plastics.
The plant also has an annual capacity of 800 million pounds of propylene, 680 million pounds of cyclohexane and 460 million pounds of benzene.
In the first quarter of 2006, the EBITDA associated with the products manufactured at the LOU was about $25 million, or less than 10 percent of Huntsman total adjusted EBITDA, it said.
The company said it would explore all options under its insurance, including repairing the facility or replacing it entirely.
The damage is unlikely to have a major impact on plans to sell or spin off certain assets, Huntsman said.
Huntsman's stock fell 65 cents, or 3.31 percent, to $19 in afternoon trading on the New York Stock Exchange. Still, it remained above a 52-week low of $16.50 touched last September when the company suspended production at several plants in the Gulf of Mexico ahead of Hurricane Rita.
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