Hurricane Ike, a strong Category 2 storm with winds of 110 mph and a 12-foot tidal surge, washed across Galveston and into Houston early last week. Within the fertilizer industry, the most damage appears to have befallen phosphate producer Agrifos Fertilizers. Still, despite the high storm surge and strong winds, damage was less than anticipated, but a lack of power will likely be an obstacle to a quick recovery.
Agrifos said Sept. 18 that the eye of the storm passed over Galveston Bay and that the surge in the Houston Ship Channel was about 12 feet. Operations ceased a day before the storm hit and no employees were killed or injured. However, one of the biggest problems the company will face was labor, since the homes of some employees were damaged or destroyed.
“Assessment work to date has discovered significant damage to office buildings, spare parts storage, dry product inventories, warehouses and low-lying motors and electrical gear,” said Agrifos. “There does not appear to have been major mechanical damage to the plant, and at this time Agrifos is working towards a progressive restart of its operating units through the course of October 2008. This preliminary plan is subject to modification as damage assessment and rehabilitation efforts continue. Agrifos has been in contact with its customers and suppliers and will keep them informed of its progress towards restarting normal operations.”
The company also reported a portion of its phosphogypsum stack’s retaining wall failed during the storm, apparently as a result of the storm surge, and about 1 million gallons of process water were released. The incident was reported to federal, state, and local authorities; however, there was “no evidence of harm to human health or the local marine environment,” the company said.
CHS Inc. told Green Markets that its urea distribution center in Galveston suffered virtually no damage. There was some cosmetic damage, with roofs suffering some damage. Cranes were reported to be standing in water and water also was reported in the office.
CHS said there was almost no damage to the 30,000 st of urea in storage. The facility has total dry capacity of 70,000 st and currently only handles urea. Company officials were able to get back to the facility on Monday, Sept. 15, to assess the damage. All employees have since returned to the facility and are in clean-up mode. However, the main problem with a return to operations is infrastructure. As of Sept. 18, CHS said they are being told it will be seven-to-ten days before electricity is back on. In addition, rail transportation remains down in the area, and the Port of Galveston is still assessing the waterways. The company said it does have one vessel of urea offshore awaiting a delivery that was originally slated for Sept. 20. There was no word on the eventual destination of the vessel, Galveston or elsewhere.
LSB Industries Inc. said its Baytown, Texas, nitric acid facility is expected to return to production Sept. 20. It had only minor damage.
Most, if not all, oil refineries in the area were off line temporarily as a result of the storm. Most suffered some damage, but a loss of power was likely to keep several out of operation for two weeks or more, which meant a loss of new sulfur supplies. Some refineries had already restarted, but at least 14 were either down or running at reduced capacity. It will take another two-to-five days for sulfur production to begin once the facilities restart.
Phosphate producers in Central Florida had sulfur inventories at the time the storm struck, and three sulfur vessels that had been harbored at Texas ports during Ike departed for Tampa late last week.
Agrifos, which obtains sulfur from several nearby refineries, will not be taking sulfur until its sulfuric acid plant restarts, which will be a problem for those refineries. However, a source said the acid plant would be the first part of the operation to restart.
Martin’s sulfur handling terminal at Beaumont had lost power but was running generators and was expected to begin receiving trucks by this weekend. In addition, the priller and ship loader there suffered no serious damage from Ike other than having power and water issues, and was expected to return to service by the weekend.
An unconfirmed report said a unit train of sulfur from Lost Cabin was at Galveston when Ike struck and the product was lost. Mosaic was Lost Cabin’s customer. Another sulfur supplier said its railcars were moved out of the city prior to the arrival of the storm and doubted the report on the loss of the Lost Cabin sulfur cars.
The impact on the NOLA DAP barge and rail markets was murky late last week. Some traders were working to replace supplies that were supposed to have come from Agrifos but may not. However, current market prices were lower last week than at the time most of the orders were made, and product replacement could become a windfall for those traders.
A source said most of the product Agrifos had stored in its two large warehouses was not damaged, but transportation could be a bigger problem. The roof of one of the warehouses suffered a collapse in the central portion, the source said.
The U. S. Minerals Management Service reported 28 oil and natural gas platforms were destroyed, but those accounted for a relatively small portion of production.