PRefChem's polymer lines shut after explosion at Malaysia's Pengerang Integrated Complex

Malaysia's PRefChem has shut its polymer lines at the Pengerang Integrated Complex following an explosion and fire Oct. 27 at a pipeline at the Petronas oil refinery in Johor, a company source confirmed Oct. 28.

"The incident report is not out yet, so it's normal for production lines to be shut for inspection," he said, adding it was still unclear when the incident report will be published.

However, the source confirmed there had been no damage to key polymer production assets such as the cracker and reactor.

The complex, a 50:50 joint venture between Petronas and Saudi Aramco, has a combined polypropylene capacity of 900,000mt/year across two PP lines, as well as a 400,000 mt/year high density polyethylene line and a 350,000 mt/year linear low density polyethylene line. Its naphtha-fed steam cracker can produce 1,260,000 mt/year of ethylene, 250,000 mt/year of propylene and 185,000 mt/year of butadiene.

Prior to the incident, polymer production rates at the lines were in the range of 70%-90%, the source said.

Traders said the shutdown of PRefChem's polymer lines was expected to have a minimal impact on prices.

"We don't see any impact on the polymers trade at the moment because both PE and PP sales are very slow," a trader based in Southeast Asia said. "Prices have been steadily dropping and customers are not keen to build inventories now."

The outage at the company's naphtha-fed steam cracker was also expected to have a limited impact on olefins markets, sources said.

"Ethylene demand has been weak due to poor PE trades, so we don't see any changes in the market from the fire, especially if the shutdown is a short one," a trader said.

A source with close knowledge of the matter said production scheduled for end December and early January should not be impacted by the incident.

Petronas in a statement said it was conducting a full assessment of the fire and would provide an update on operations as soon as possible.

An earlier version of this article incorrectly stated propylene and butadiene production capacity. These have now been corrected.