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U.S. Refineries Are Shut, Offshore Wells Closed, for Hurricane

Bloomberg

 

 

U.S. Refineries Are Shut, Offshore Wells Closed, for Hurricane 

By Jordan Burke

Sept. 1 (Bloomberg) — At least eight refineries across the U.S. Gulf Coast, including plants owned by Valero Energy Corp.,ConocoPhillips and Exxon Mobil Corp., have been shut as companies brace for Hurricane Gustav’s arrival.

Almost half of U.S. refining capacity is located along the Gulf Coast. The shuttered refineries are taking with them about 1.56 million barrels a day of crude oil processing capacity, or 9.8 percent of the U.S. total. Another five refineries were operating at reduced rates.

Gustav, a Category 3 hurricane, was about 220 miles (360 kilometers) southeast of New Orleans, Louisiana, packing winds of 115 miles an hour, the National Hurricane Center said. It may reach Louisiana as early as midday with a force “not very different” from its current strength, the center said in anadvisory issued 10 p.m. Miami time yesterday.

Crude oil for October delivery rose 99 cents, or 0.9 percent, to $116.45 a barrel in after-hours electronic trading on the New York Mercantile Exchange at 12:01 p.m. Singapore time. Prices are up 21 percent this year.

Gasoline for October delivery gained 6 cents, or 2.1 percent, to $2.9142 a gallon on the exchange the same time.

Refineries in Texas and Louisiana can process 6.44 million barrels a day of oil, turning it into products including gasoline and diesel fuel. About 28 percent, or 2.36 million barrels a day, of the U.S. gasoline supply is produced along the Gulf Coast, according to the Energy Department.

In 2005, Hurricanes Katrina and Rita idled about 19 percent of the country’s refining capacity.

Gulf Oil, Gas Production

Companies idled 96 percent of Gulf of Mexico oil output and 82 percent of natural-gas production as Hurricane Gustav moved toward the region, theMinerals Management Service said in a report on its Web site yesterday.

Personnel from 86 offshore rigs and 518 production platforms have been evacuated, according to the report. About 1.25 million barrels of daily oil output and 6.09 billion cubic feet of gas a day were shut.

The Gulf of Mexico accounts for 26 percent of U.S. oil output and 14 percent of natural-gas production. The Gulf normally produces an estimated 1.3 million barrels of oil and 7.4 billion cubic feet of gas a day, according to the agency, part of the U.S. Interior Department.

Valero, the largest U.S. refiner, shut down its St. Charles, Louisiana refinery, which can process 185,000 barrels per day.

Valero’s Port Arthur, Houston and Texas City, Texas refineries were running at reduced rates. Combined the plants can process about 572,000 barrels a day. Valero is based in San Antonio.

Motiva, ConocoPhillips

Motiva Enterprises LLC, a Houston-based joint venture of Royal Dutch Shell Plc and Saudi Arabia’s state oil company, said it shut its Norco, Louisiana, plant, which can process 236,400 barrels a day. Motiva also reduced rates at its Convent refinery, which can process about 235,000 barrels a day, and its 285,000 barrel-a-day Port Arthur plant.

ConocoPhillips, based in Houston, shut its Lake Charles, Louisiana, refinery, which can process 239,000 barrels a day, and its Alliance refinery in Belle Chase, Louisiana, which can process about 247,000 barrels per day.

Houston-based Marathon Oil Corp. shut its Garyville, Louisiana, refinery, which can process about 256,000 barrels a day. El Dorado, Arkansas-based Murphy Oil Corp. shut its Meraux, Louisiana, plant located near New Orleans. The refinery can process about 120,000 barrels a day.

Chalmette Refining LLC, a joint venture of Irving, Texas- based Exxon Mobil and Petroleos de Venezuela SA, shut its Chalmette, Louisiana, plant. The refinery can process about 193,000 barrels per day.

Alon USA Energy Inc. based in Dallas, shut its Krotz Springs, Louisiana, which can process about 80,000 barrels a day.

To contact the reporter on this story: Jordan Burke in New York at[email protected].

Last Updated: September 1, 2008 00:03 EDT

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