OQ Declares Force Majeure in Texas

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OQ Declares Force Majeure in Texas
Heavy snow earlier this week in Dallas, Texas. OQ Chemicals said it was forced to temporarily shut down its Bay City, Texas plant site due to severe winter weather affecting the Texas Gulf Coast area and its terminals, barging and shipping facilities, as well as the company's plant operations. © Marouanesitti / Shutterstock.com

OQ Chemicals said Monday that it was declaring force majeure for the supply of chemicals produced at its Bay City, Texas, plant after closing the facility due to widespread disruptions caused by severe cold weather.

Chemicals covered by the declaration include oxo alcohols used in the production of lubricants and other applications.

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An arctic weather front stretching across much of the middle of the United States caused temperatures for large parts of Texas to fall to record low levels in the single digits Farenheit at the start of the week. Snow and ice – rare events for the area – snarled transportation, but the biggest disruptions were rolling power outages that affected between 3 million and 4 million customers.

OQ, formerly named Oxea, said the Bay City plant closed temporarily because of impacts to the facility itself and because of impacts on terminals, barge operations and shipping facilities. The declaration applies to oxo alcohols, aldehydes, acids and esters made at the plant.

OQ, which is based in Monheim am Rhein, Germany, did not estimate how long the declaration would last but said it was working to restore normal supply as quickly as possible. Force majeure is a legal term for situations in which businesses are not able to meet contractual obligations because of extraordinary and unforeseen circumstances.

On the same day as its force majeure declaration, OQ announced it was implementing sales controls on several products – n‑Heptanoic Acid, n‑Pelargonic Acid, n‑Heptanal, n‑Nonanal, and n‑Undecanal – because of disruptions in raw material supply and plans to close the Bay City plant for maintenance.

Power plants in Texas are susceptible to operational problems during severe cold weather. Some states require utilities to employ technology that protects from such conditions, but Texas does not since temperatures there so rarely fall that low.

Utilities said they opted for rolling outages intended to cut power to customers for stretches of 15 to 45 minutes in efforts to prevent complete blackouts, which could have taken caused outages to last for a month. On Tuesday officials with the Electric Reliability Council of Texas said disruptions were expected to last for days but that they could not estimate how many.