🏭 Taking the L (out of LNG)

Good morning. Last edition covered two start-ups, so today's edition is covering one shut-down. Just to spice it up.

From the condenser:

· Freeport LNG's fire

· Dow and Shell's electric steam cracker

· MOTD: acetylene

Freeport LNG's fire means less NG for Europe

Houston-based natural gas liquefaction company, Freeport LNG, doesn't expect its Quintana Island, TX site to restart for at least three months following their fire last week.

The context you need:

Natural gas is used for heating, electricity generation, and as a feedstock for chemicals like ammonia (which later becomes fertilizer) and methanol (which later becomes formaldehyde, acetic acid, and MTBE). Some regions (like Asia and Europe) demand way more natural gas than they can produce domestically. So, instead of building pipelines, natural-gas-rich-regions (like the US and the Middle East) liquefy the gas and ship it overseas. When the liquefied gas arrives (that's LNG) it is expanded and sent down pipelines for local use.

Wait, there was a fire?

Last week, Freeport LNG's accidentally ruptured a high pressure pipe containing LNG. The liquid quickly became a gas (we call that flashing) and ignited (ignition source still unknown). Fortunately, nobody was injured and the fire was put out in under an hour. In any case, equipment was damaged and the company thinks repairs won't be completed "until late 2022". They are shooting for a 90-day turnaround.

Bigger picture:

In case you forgot, Europe was already low on its natural gas reserves (thanks to a cold winter) and Russia is exporting less natural gas to Europe (because of their war on Ukraine). In response to those shortages, US companies increased their LNG exports to Europe. This particular liquefaction site is huge—it's responsible for about 20% of the entire US LNG export capacity—so Europe's natural gas shortage is going to hit even harder. Expect higher prices for energy and chemicals in Europe and lower prices in the US (at least in the short term).

Dow and Shell are cracking with electricity

Midland-based chemical company, Dow Chemical, and oil and gas giant, Shell, announced that their electric steam cracker experimental unit is operational.

Here's the background:

Steam crackers are the foundation of the petrochemical industry. These enormous units produce nearly all of the platform chemicals that enable modern society. But that comes at a cost—the units are extremely energy-intensive and rely on heat produced from the combustion of natural gas. That heat production is responsible for about half of all petrochemical emissions. With increasing pressure to reduce emissions, companies have been searching for ways to power these crackers with renewables by electrifying the furnaces (like the heating element in your oven).

So, what's going on here?

Prior to spending billions of dollars on the idea, Dow and Shell need to validate that the technology works at smaller scales. This "experimental unit" could probably fit in most bedrooms, but it's actually the first tangible progress any of these companies have ever released. If all goes well, the companies will build and start-up a multi-megawatt pilot plant in 2025 (for reference, BASF, SABIC, and Linde are shooting for next year).

Zooming out:

Electric cracking is the holy grail of the petrochemical industry. These companies have already spent billions of dollars on steam cracking assets—being able to rid them of their Achilles' heel (the emissions) while retaining asset value (by retrofitting) is a dream come true. Either way, it might end up more like a race than anything else—what will scale faster? Electric crackers or new platform molecules?

Some more headlines:

• Olin is going to bring part of its chlor-alkali site back online

• Kuraray has agreed to buy some of Origin Materials' future production

• Toray and LG Chem officially established that battery separator JV we talked about

• You should give ExxonMobil's response to Biden a read

• Solvay no longer needs fluorosurfactants for its peroxide curable fluoroelastomers (FKM)

Molecule of The Day:

Today's MOTD is worth your attention, it's acetylene.

This highly reactive molecule's name deviates pretty far from IUPAC's desires (you saw it in organic chemistry as ethyne). When Edmund Davy discovered acetylene back in 1836 he figured it would be "admirably adapted for the purpose of artificial light, if it can be procured at a cheap rate.". It turns out that its useful for quite a bit more than that—the world now produces over 600,000 tons of acetylene each year (production had previously peaked in the mid-1960s).

Today, acetylene produced in the US, Western Europe, and Russia is primarily done by the partial oxidation of natural gas or as a steam cracker coproduct. In China, where the vast majority of acetylene is consumed, the molecule is produced by the old calcium carbide process. About 85% of the stuff is used to make vinyl chloride monomer (used to make PVC), vinyl acetate monomer(used to make PVAc, and 1,4-Butanediol (which often becomes spandex).

The main companies churning out all this acetylene are Linde, Air Liquide, Sinopec, Jinhong Gas, and many more.

In case you're interested:

• Written Interview: Give this conversation featuring the CEO of Olin on the epoxy, acetyl, and chlorovinyl chains a read.

• Book: How can you expect to understand the chemical industry without knowing its history? Start with Fred Aftalion's introduction.*

• Tip: If you like this newsletter but want some non-chemical business news, look no further than Morning Brew.*

• Video: Shawn Esquivel broke down climate change really well. Check out his video here!

The bottoms:

All views represent those of the author not their employer.