US Gulf Coast Refiners Works On Compensating Ida’s Damages


  • The effect of widespread refinery closures in Louisiana will reverberate in the Gulf coast fuel market in the coming weeks.
  • ExxonMobil Baton Rouge was the first shut-in refinery in Louisiana to announce a restart.

The effect of widespread refinery closures in Louisiana will reverberate in the Gulf coast fuel market in the coming weeks despite an initially muted reaction, reports Argus Media.

Refineries Market 

The spot market’s reaction to Hurricane Ida and the numerous refineries it helped knock offline has been mostly limited to a bump in Nymex futures on 30 August, when Gulf coast gasoline and diesel prices went to one-month highs.

But the refined products market in Louisiana will likely tighten in coming weeks with at least six refineries, comprising 1.6mn b/d of production, remaining shut down and in damage assessment mode today. Several more refineries in the region have declined to disclose operational status altogether, creating a patchwork of uncertainty.

Various Refineries’ Various Outcomes

ExxonMobil Baton Rouge’s Restart

ExxonMobil Baton Rouge was the first shut-in refinery in Louisiana to announce a restart. But it is uncertain if the facility has access to the crude necessary to regain full operational capacity in the short term, with several ports still closed and power down in much of Baton Rouge. The refinery counts motor gasoline, diesel, aviation fuel, lubricating oils, waxes and petroleum coke among its products.

Chevron’s Results

Chevron told Argus today that its 356,000 b/d Pascagoula, Mississippi, refinery continues to operate and supply products to customers. But the company declined to say whether it will forge ahead with a multi-unit turnaround at the refinery this month or delay work until October.

Placid Refining Status

Placid Refining did not respond to a request for comment about the status of its 75,000 b/d refinery in Port Allen, Louisiana, and Delek was mum on the status of its 80,000 b/d site in Krotz Springs, Louisiana.

Shell’s Report

Shell, which reported some damage at its 250,000 b/d Norco refinery yesterday, said that the 240,000 b/d Convent refinery it shut earlier this year has reported no damage.

Louisiana’s Anticipations

September ramp-ups are anticipated at refineries in Texas to cover product shortages arising from the shut ins in Louisiana, one union source told Argus today.

Pipeline Distribution Market

Product distribution will likely be beset by logistical issues in the coming weeks. While offline refineries with their safety flares burning are visible signs of the storm’s damage, Ida’s impacts on pipeline distribution systems could have more immediate effects on market pricing.

Phillips 66’s Confirmatory Announcement

Phillips 66 confirmed today that a section of pipeline shut down before Ida’s landfall on 29 August was compromised, leading to a leak and increased flaring. The company declined to disclose the name or location of the affected pipeline.

Kinder Morgan confirmed that the section of its 700,000 b/d Products (SE) Pipe Line system running from Mississippi to North Carolina may reduce rates tomorrow for the second time this week, because the company is unable to source products from its out-of-service Baton Rouge terminal.

Further downstream, local power operators will prioritize bringing power back to Louisiana-area retail gas stations after restoring electricity to hospitals and other critical infrastructure, Entergy Louisiana president Phillip May said in a broadcast interview today.

Louisiana Oil Marketers’ Crisis

Roughly 60pc of gasoline stations in Ascension Parish west of New Orleans and south of Baton Rouge remained open today amid widespread power outages and fuel shortages, Louisiana Oil Marketers and Convenience Store Association director Natalie Isaacks said in a broadcast interview.

Fuel distributors in the state are still facing long wait times to load fuel from terminals that remain open, Isaacks said, after some trucks waited four hours or more to load ahead of the storm.

Did you subscribe to our daily newsletter?

It’s Free! Click here to Subscribe!

Source : Argus Media


This site uses Akismet to reduce spam. Learn how your comment data is processed.