Page 9 - NorthAmOil Week 37

NorthAmOil COMMENTARY NorthAmOil

Gulf operations shut in again

as Hurricane Sally hits

Oil and gas operations in the US Gulf of Mexico and on the Gulf Coast were

shut in again this week as Hurricane Sally passed through the region and

made landfall in Alabama

US GULF COAST PRODUCERS, refiners and other oil and gas barrel per day (bpd) Alliance refinery in Louisi-
industry players shut in the US Gulf of Mexico ana. The storm is reported to have had no direct
WHAT: and on the Gulf Coast this week ahead of Hurri- impact on the plant, but Phillips 66 is taking the
Upstream and cane Sally moving the region. Sally made landfall opportunity to prepare to begin maintenance
downstream operations in Alabama on September 16 after strengthening work planned for October, during which time
alike went offline in the to a Category 2 storm. most of the refinery will remain shut down.
Gulf region. It is the second hurricane in less than four Phillips 66 has not emerged entirely unscathed
weeks to result in shut-downs and evacuations from recent weather events on the Gulf Coast,
WHY: after Hurricane Laura passed through the Gulf however. The company’s 249,000 bpd Lake
Hurricane Sally passed and made landfall in Louisiana as a Category 4 Charles refinery remains shut down following
through the Gulf and storm in late August. Indeed, efforts to clean up Hurricane Laura. The company has described
made landfall in Alabama damage from Laura are still ongoing in the Lake the damage caused by Laura to the refinery as
on September 16. Charles area, and facilities including refineries “moderate”, but hurricane winds destroyed a
and the Cameron LNG terminal remain offline cooling tower – albeit one that was already slated
WHAT NEXT: as a result of storm damage in the region. This for replacement in October. In filings to state reg-
The Gulf output outages includes damage to transmission lines that has ulators, Phillips 66 estimated that repairs at the
helped push up oil resulted in local power outages. Lake Charles refinery could take more than three
prices just as they were months, but the facility is expected to resume
weakening on demand Second storm some operations when power is restored to the
concerns. With Alabama and Florida taking the brunt of region. Electricity provider Entergy is aiming to
Hurricane Sally, most oil and gas infrastructure restore power by the end of September.
further west along the coast, in Louisiana and Close to 1mn bpd of crude refining capacity
Texas, appears to have escaped the worst. is estimated to be offline currently in Louisiana,
Among those facilities to go offline ahead of including Citgo Petroleum’s 425,000 bpd Lake
the hurricane’s arrival was Phillips 66’s 255,600 Charles refinery.

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