Local Glitches Drag U.S. Refinery Capacity Down

Maritime Activity Reports, Inc.

January 13, 2015

U.S. oil refiners work to recover from weekend glitches, fires.

Three of the largest U.S. oil refineries will be working to restore operations on Tuesday after a series of weekend glitches temporarily knocked out some 1 million barrels per day (bpd) of processing capacity, the worse spate of outages in years.

A fourth plant, Husky Energy Inc's 155,000-bpd Lima, Ohio, refinery, is not expected back online until the end of the week after a blast at its 25,000-bpd isocracker unit, which sources have said was extensively damaged.

The disruptions - which included three fires on Saturday and one shutdown late last week - affected about one-fifth of the refining capacity in the eastern half of the United States, fueling deeper losses in U.S. crude oil prices, but boosting prompt gasoline and diesel prices in the New York harbor.

Although there was no indication that the incidents were linked, the East Coast was experiencing its coldest stretch of the winter at the time. Cold weather can sometimes complicate operations at high-pressure refinery units.

Philadelphia Energy Solutions' 335,000-bpd refinery, the largest on the East Coast, is due to restart its larger 200,000-bpd crude unit on Tuesday after a utility system failure, according to a person familiar with operations. The plant is also pressing ahead with maintenance at a handful of secondary units due to start in a week's time.

Marathon Petroleum Corp's 212,000-bpd Robinson, Illinois, refinery plans to restart by Tuesday after a fire shuttered its crude unit and vacuum distillation unit, a source said. It was unclear what had caused the fire.

Also in Illinois, BP Plc was restarting a 90,000-bpd crude unit and a 60,000-bpd reformer at its Whiting plant on Monday after freezing weather caused them to shut on Jan. 8, sources said. Restart plans over the weekend were also delayed by cold weather.

The largest crude unit at the refinery with a 240,000-bpd capacity briefly cut back production over the weekend, but returned to normal service Monday.

For physical crude oil markets, the outages may add to pressure that has been steadily building for months. The response in cash markets on Monday was muted as supply remained abundant and most outages appeared set to be brief.

By Jarrett Renshaw

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