In the early hours of June 30, a fire broke out on a naphtha pipeline near the facilities of Haldia Petrochemicals Limited (HPL) in West Bengal, India. Local police and firefighters responded immediately, deploying more than ten fire engines. The blaze was brought under control after more than ten hours of firefighting. The incident injured more than 20 people, damaged several nearby homes, and temporarily disrupted railway services.
HPL said in a statement that the fire occurred near a suspected illegal naphtha tapping point. The company is cooperating with local authorities and police as the investigation continues. While the statement did not indicate any damage to production units, it urged nearby residents not to tamper with or illegally siphon petroleum products.
HPL is one of India's largest naphtha crackers and a major olefins producer in eastern India. The complex has an annual ethylene capacity of 676,000 tonnes and a propylene capacity of 350,000 tonnes, with downstream facilities producing polyethylene (PE), polypropylene (PP), styrene, benzene, paraxylene (PX), and other petrochemical products. Naphtha is supplied continuously to the cracker through dedicated pipelines. Following the pipeline shutdown, feedstock supply was interrupted, forcing the cracker and several downstream units to reduce operating rates, tightening regional polyolefin supply.
The incident quickly affected the Asian spot naphtha market. Buying interest for nearby cargoes increased, leading to firmer spot prices. The price movement was driven less by an immediate shortage of physical supply than by growing uncertainty over regional availability. As one of the few large-scale naphtha cracking complexes in India, HPL plays an important role in supplying olefins to eastern India. A prolonged production disruption could further tighten regional spot availability.
Although India is not China's largest source of polyethylene and polypropylene imports, it remains an important supplier within Asia. Reduced operating rates at HPL are expected to lower export availability, providing support to regional spot prices and potentially increasing procurement costs for Chinese importers.
However, the Middle East, South Korea, and Southeast Asia remain China's primary suppliers of imported polyolefins, and production at major facilities in these regions remains stable. As a result, the impact on the Chinese market is expected to be limited mainly to short-term spot prices and trading activity, with little effect on the overall supply-demand balance.
The direction of the investigation has also drawn industry attention. In recent years, India has experienced multiple incidents involving illegal tapping of oil, natural gas, and petrochemical pipelines, some of which resulted in leaks and fires. HPL's reference to a suspected illegal tapping point, rather than equipment failure, has once again highlighted concerns over pipeline security in the country's petrochemical industry.
