Damaged Geismar Plant Could Restart In April
GEISMAR, La. (AP) — Williams Olefins LLC expects in early April to restart its Geismar plant that was damaged in June by a fire and explosion that fatally burned two men and injured 114 people.
Williams Partners, of Tulsa, Okla., said it expects to finish the estimated $102 million in repairs by April and also a $450 million to $500 million ethylene production expansion that had been underway at the time of the June 13 explosion and fire.
Williams officials also said they are working to reduce, as much as economically possible, the time to complete the repair, which is a key step in restarting the facility.
The plant has been shut down since an equipment failure led to the explosion near a propylene fractionator, which prompted ongoing probes by the U.S. Occupational Safety and Health Administration and the U.S. Chemical Safety Board.
The burned fractionator, part of which was ripped open, refines propylene for products such as consumer plastics.
Williams officials announced their plans Wednesday as the company released its earnings for the second quarter that ended June 30.
"We're pleased to report a solid second quarter primarily due to continued growth in our fee-based business, which more than offset both lower commodity margins and the impact of downtime at the Geismar facility," said Alan Armstrong, Williams president and chief executive officer, in the earnings statement.
"At Geismar, I'm extremely proud of the progress our people have made in a relatively short amount of time to assess the damage from the incident and begin mobilizing comprehensive repair and expansion plans to achieve our April 2014 target in-service date."
In the second quarter, the company had adjusted net income of $129 million from continuing operations, or 19 cents per share.
That's down from $138 million, or 22 cents per share, in the second quarter of 2012.
Unadjusted net income figures, which were not limited only to ongoing operations, actually showed a $10 million increase between the second quarters of 2012 and 2013, but the same share price at 21 cents.
Williams officials also said they are slightly lowering their 2013 and 2014 guidance for earnings and distributable cash flow to reflect the Geismar fire and expected lower margins for processing natural gas liquids.
Williams has $500 million in combined business interruption and property damage insurance coverage related to the fire.
The company expects to receive $384 million from its insurers in 2013 and 2014 for business interruption losses.
Company officials said in a separate statement Wednesday that expansion construction around most of the Geismar plant has resumed, except in the immediate area of the fire.
Williams Olefins is trying to increase its ethylene production capacity by 50 percent.
Williams Partners also is engaged in the engineering, procurement and demolition of affected equipment for the repairs, company officials said.