Burst! BASF & Shell joint venture factory closed!

The styrene and propylene oxide (PO) plant at Ellba, a joint venture run by Shell and BASF, has reportedly been closed due to technical problems. The two joint venture partners chose not to comment when asked.

It was not immediately clear how long the plant would remain out of operation. What is clear, however, is that production shutdowns could further exacerbate tensions in the styrene market, at least in the near-term with volatile supplies. So far, only meager downstream demand has eased the bottleneck in production. However, there could be production problems across Europe if demand picks up after the holidays as expected. According to reports, due to the shortage of styrene, some EPS suppliers have been unable to fully serve all customers and had to abandon some business.
According to PIE’s Polyglobe database (www.Polyglobe.net), of the approximately 5.5 million t/y styrene capacity in Europe, excluding the 680,000 t/y located in Russia, about a third of the capacity remains after the Ellba overhaul available. Research by the PIE price team shows that the spot price of styrene continues to rise and is currently at $1,550/ton. Therefore, further increases in polystyrene prices in September seem inevitable.

Overview of the joint venture Ellba

Ellba, a company located in Moordijk, the Netherlands, is a joint venture between Shell and BASF, and Shell is responsible for the operation of the plant. The factory had an explosion and caught fire on June 3, 2014. Before the accident, the production capacity of styrene monomer was 550,000 tons per year and that of propylene oxide was 250,000 tons per year. Reconstruction work still follows the original design.

The complex plant system in Murdek also includes another styrene monomer and propylene oxide production plant with a capacity of 450,000 tons/year and 210,000 tons/year respectively, and an ethylene plant (900,000 tons/year) , propylene steam cracking unit (500,000 tons/year), pure benzene extraction unit (500,000 tons/year), butadiene extraction unit (115,000 tons/year), butadiene hydrogenation unit (105,000 tons/year), styrene ethane plant (640,000 tons/year), ethylene glycol plant (155,000 tons/year), ethylene oxide plant (305,000 tons/year) and pyrolysis gasoline hydrogenation unit (750,000 tons/year).

BASF sold stake in another joint venture to Shell

On December 18, 2014, BASF announced that it had reached an agreement with Shell to sell its shares in the Singapore joint venture ELLBA Eastern to Shell. The parties did not disclose financial details of the deal.

As part of the agreement, BASF has also signed a supply contract with Shell, and Shell will continue to provide BASF with the required propylene oxide.

Ellba Eastern is a 50:50 joint venture between BASF and Shell, located on Jurong Island, Singapore. The joint venture, operated by Shell, produces styrene and propylene oxide.

ELLBA Eastern was put into operation in 2002 and is fully integrated in Shell’s production base in Langqiao Island, Singapore. It has a propylene oxide plant with an annual output of 250,000 tons and a styrene plant with an annual output of 550,000 tons. ELLBA, another BASF-Shell joint venture in Moordijk, the Netherlands, is not affected by the deal.