When Petrochemicals Go Bad: Who's to Blame for Off-Spec Cargo?

Litigation, North America

A transoceanic shipment of butadiene arrived off-specification at its destination after a three-week voyage resulting in a claim against the trader, who, in turn, blamed inadequate refrigeration on the vessel. Baker & O'Brien analyzed the records to evaluate three potential scenarios that could have caused this issue, including: 1) contamination at the production source; 2) contamination of a ship compartment before loading; and 3) refrigeration was not maintained during shipment. We investigated the possible causes and submitted an expert report and provided deposition testimony.

Although the occurrence is not common, some petrochemical products have a limited "shelf life" and, over time, become degraded to the point they become unusable. This is the case with butadiene, a base petrochemical used to manufacture rubber products such as automobile tires.

Butadiene, an "unsaturated" coproduct from naphtha steam cracking operations (where ethylene is the primary product), is naturally more reactive than saturated hydrocarbon molecules, like butane, which shares the same number of carbon atoms. Similar to butane, butadiene is stored in a liquid state under pressure. Due to its chemical structure, it can naturally self-react to form a "dimer" molecule that is undesirable in the rubber-producing process. Although the reaction is impossible to stop at elevated temperatures, it can be inhibited by keeping the product cold (near 32 F).

A waterborne cargo of butadiene was assembled from several production sources in Western Europe by a petrochemical trader. The cargo constituents were loaded into a specialized ship with product refrigeration capabilities. The vessel transported the butadiene cargo to the U.S., with the voyage taking about three weeks. This occurred during the summertime when ambient temperatures were elevated. Upon arrival, the cargo was determined to be off-specification due to a very high content of dimer.

The purchaser of the butadiene cargo filed an action against the petrochemical trader who, in turn, attributed the cause of the off-spec cargo to inadequate refrigeration on the vessel. Baker & O'Brien was asked to examine the records and make a determination of the likely cause of the off-specification cargo. Considerations included whether: 1) the ship maintained the butadiene at its proper temperature; 2) the ship compartments could have been contaminated before the cargo was loaded; or 3) one or more of the original constituents of the cargo loaded in Europe were off-specification.

Baker & O'Brien submitted an expert report and provided deposition testimony on this matter.

Kevin G. Waguespack

Chief Executive Officer

Industry
Transportation and Storage / Chemicals and Petrochemicals
Service
Commercial Contracts / Litigation / Product Quality
Region
North America / Western Europe