Chinese Gas Shortfall stops BASF’S MDI plant

BASF has declared force majeure on deliveries from its 400,000 t/y production for polyurethane feedstock MDI at Chongqing, near Shanghai, China, and has had to stop production temporarily due to a shortfall of natural gas at its syngas supplier.

The German chemicals and plastics giant said its gas supplier has not yet provided a timeline for restart of the MDI plant, as the company is dependent on a decision by Chinese authorities to release it.  BASF said, however, it is communicating with customers “proactively” about the situation.

At the behest of the government, the output of gas contracted to BASF is said to have been redistributed to areas of the People’s Republic where many households have not yet converted coal-fired furnaces to run on gas. Local media reports say that other chemical producers in other Chinese regions have also had to shutter their plants because of the gas shortage.

Because of an agglomeration of toxic fog in the last several winters especially, Beijing last summer widely banned the use of coal for heating in some areas, including in the country’s capital. Some municipalities were ordered to reduce coal pollution by 15% but may have underestimated the amount of gas needed to replace the restricted fuel.

As the heating crisis has deepened, newspapers have recently been circulating photos of shivering citizen. According to the latest reports, some households are now being allowed to fire up their coal furnaces temporarily, and a coal-fired power plant has been restarted.