Page 10 - NorthAmOil Week 37 2021

NorthAmOil PERFORMANCE NorthAmOil

Phillips 66’s Alliance
refinery may be too
badly damaged to
justify the cost of
repairs.

Gulf Coast refiners make progress on

restarts, damage assessments from Ida

US GULF COAST REFINERS on the US Gulf Coast have contin- week, Valero restarted its 215,000 bpd St Charles
ued to assess the damage from Hurricane Ida – and 135,000 bpd Meraux refineries, along with
which hit the region at the end of August – make the 19,000 bpd renewable diesel plant in Norco,
repairs and bring facilities back online. However, Louisiana, in which it partners with Darling
in some cases the damage may be so severe that a Ingredients.
restart may not be possible. Around 2.2mn bpd of refining capacity went
Last week it emerged that downstream offline ahead of Ida’s arrival, and following Vale-
player Phillips 66 may be forced to idle a refinery ro’s restarts, less than 500,000 bpd remained
in Louisiana as a result of severe damage from offline. This includes Royal Dutch Shell’s Norco
Hurricane Ida. Citing sources familiar with the refinery.
matter, Bloomberg reported on September 10 Further complicating the region’s efforts to
that the plant had suffered so much damage that return to normal operations was Hurricane
repairs may be too costly. Nicholas, which made landfall in Texas as a
The Alliance refinery in Belle Chasse, which Category 1 hurricane on September 14 but was
has the capacity to process more than 250,000 downgraded to a tropical depression later that
barrels per day (bpd) of crude, was shut on day.
August 28, the day before Ida made landfall, and The main impact from Nicholas was felt
sustained flooding. offshore, where Gulf of Mexico producers had
A separate report by Reuters, also released on to shut in production or pause recovery efforts Further
September 10, cited sources familiar with plant from Ida as the storm approached. Shell halted
operations as saying the refinery could remain production at its Perdido platform – which had complicating the
shut for months in order for repairs to be carried not been affected by Ida.
out. The company was reported to still be assess- As of September 16, over 28% of Gulf oil out- region’s efforts to
ing the damage, with floodwaters having not yet put and 39% of gas production remained shut
receded as of last week, though the breach in the in, according to the US Bureau of Safety and return to normal
south flood wall had been secured. Environmental Enforcement (BSEE). Person- operations
But according to the Bloomberg report, nel remained evacuated from 42 platforms in
expectations of a months-long outage may be the Gulf – around 7.5% of the total – and two was Hurricane
optimistic. Phillips 66’s CEO, Greg Garland, was dynamically positioned rigs remained off their
due to visit the refinery this week, the Bloomb- location. Nicholas.
erg sources said. In the meantime, a Phillips Onshore, refiners were largely unaffected
66 spokesman, Bernardo Fallas, said there’s no by Nicholas, but the Freeport LNG terminal
operational update or timeline for restarting the in Texas went offline owing to a power outage
facility. caused by the storm.
This development comes less than a month Power outages also briefly disrupted service
after Phillips 66 put the Alliance refinery up for on Colonial Pipeline’s main gasoline and diesel
sale. Reuters reported at the time that the com- pipelines out of Houston, with its gasoline pipe-
pany was in talks with a potential buyer. How- line resuming some shipments on September 14.
ever, damage to the plant may now complicate LyondellBasell Industries’ plastics plant in Mata-
this process. gorda County, Texas, also saw production halted
Others, meanwhile, have had better luck. This by power outages.™

P10 www. NEWSBASE .com Week 37 16•September•2021