Huntsman plant repairs delayed

Salt Lake-based Huntsman Corp., the fifth-largest U.S. chemical maker, said "extensive damage" to its Port Arthur, Texas, olefins plant from a late April fire will delay the start of repairs until the second half of June.

The plant, which accounts for 30 percent of the company's production capacity for ethylene, a key plastics ingredient, won't be structurally stable enough for workers to begin repairs until the week of June 19, spokesman Don Olsen said Monday in a telephone interview. Interior photos indicated the damage was extensive, he said.

"It will probably be the third week of June before we get people in there full time," Olsen said. "We want to make sure that it is structurally sound."

Huntsman hasn't determined the fire's cause or assessed the extent of the damage, Olsen said. He declined to estimate when output would resume. The shutdown idled 1.8 percent of North American ethylene production, tightening supplies and helping producers such as Dow Chemical Co. halt a five-month slide in contract prices.

The plant probably will be closed for the rest of 2006, Banc of America Securities analyst Kevin McCarthy said Monday in a note to clients.

"We knew when it happened the damage would be extensive," Olsen said. "The photos have proven the damage is extensive."

Contract ethylene rose 1.5 cents a pound, or 3.3 percent, to 47 cents in May, the first gain this year, McCarthy said. Prices probably will be unchanged through July because supply and demand remain balanced, he said.

The Port Arthur plant can produce 1.4 billion pounds of ethylene a year, 800 million pounds of propylene and 460 million pounds of benzene, Huntsman said. Products from the plant generated about $25 million of first-quarter profit for Huntsman before interest, taxes, depreciation and amortization. That's less than 10 percent of the company's total.

The fire on April 29 was preceded by an explosion at the plant's propylene refrigeration unit, the U.S. Chemical Safety Board, an independent federal agency, said last month. No one was injured, Huntsman said at the time.

Dow is the largest U.S. chemical maker by 2005 sales, followed by Exxon Mobil Corp., DuPont Co. and Lyondell Chemical Co.