The styrene and propylene oxide (PO) plant at Ellba, a joint venture operated by Shell and BASF, was reportedly shut down due to technical issues. The two joint venture partners chose not to comment when asked.
It was not immediately clear how long the plant would be out of action. What is clear, however, is that the shutdown is likely to further exacerbate tensions in the styrene market, at least in the near term. So far, only meager downstream demand has eased production bottlenecks. However, if demand picks up after the holidays as expected, there could be production problems across Europe. According to reports, due to the shortage of styrene, some EPS suppliers have been unable to adequately serve all customers and have had to abandon some of their operations.
According to PIE's Polyglobe database, of the approximately 5.5 million tons/year of styrene capacity in Europe, excluding the 680,000 tons/year located in Russia, about a third of that capacity is still available after the Ellba overhaul. Research by the PIE price team shows that spot prices for styrene continue to rise and are currently at $1,550 / ton. Thus, a further increase in polystyrene prices in September seems inevitable.
Joint venture Ellba Overview
Ellba, based in Murdike, the Netherlands, is a joint venture between Shell and BASF, with Shell operating the plant. The plant exploded and caught fire on June 3, 2014. Before the accident, the plant had a styrene monomer capacity of 550,000 tons/year and a propylene oxide capacity of 250,000 tons/year. The reconstruction work followed the original design.
The compound plant system in Muldike also includes another styrene monomer and propylene oxide production plant with a capacity of 450,000 tonnes/year and 210,000 tonnes/year respectively. There is also an ethylene plant (900,000 tons/year), propylene steam cracking plant (500,000 tons/year), pure benzene extraction plant (500,000 tons/year), butadiene extraction plant (115,000 tons/year), butadiene hydrogenation plant (105,000 tons/year), phenethane plant (640,000 tons/year), and B Diol plant (155,000 tons/year), ethylene oxide plant (305,000 tons/year) and cracked gasoline hydrogenation plant (750,000 tons/year).
Basf has sold shares in another joint venture
On December 18, 2014, BASF announced that it had reached an agreement with Shell to sell its stake in ELLBA Eastern, a Singapore joint venture, to Shell. Financial details of the deal were not disclosed.
As part of the agreement, BASF has also entered into a supply contract with Shell, which will continue to supply the propylene oxide required by BASF.
Ellba Eastern is a 50:50 joint venture between BASF and Shell based on Jurong Island, Singapore. The joint venture, operated by Shell, produces styrene and propylene oxide.
ELLBA Eastern, which began production in 2002, is fully integrated within Shell's Langqiao Island production site in Singapore, with a 250,000 tonnes per annum propylene oxide plant and 550,000 tonnes per annum styrene plant. ELLBA, another BASF/Shell joint venture based in Murdike, the Netherlands, is not affected by the deal.
