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Gulf refineries close to restarting
TWO OTHERS HAD MAJOR DAMAGE FROM HURRICANE
By Steve Quinn
Associated Press
JACKSON, Miss. - As half of the Gulf Coast refineries damaged by Hurricane Katrina begin to ramp up production this week, industry experts have this message: Be patient.
``What you've got are a whole series of requirements and processes and that takes days, if not weeks,'' said John Felmy, chief economist for the American Petroleum Institute.
The going is also slow for the restoration of offshore oil and gas production. Almost 70 percent of normal oil production and half of the natural gas output remains shut down, according to the U.S. Minerals Management Service, which said activity is slowly recovering.
Eight major refineries that produce gasoline, diesel and jet fuel and heating oil were knocked out of commission and the output at two others was cut by last week's killer hurricane and the flooding that followed. That cut overall U.S. refining capacity by more than 10 percent and contributed to a surge in retail gasoline prices and spot shortages around the country.
Motiva Enterprises, Marathon Oil and Valero Energy said they hope to restart, and in some cases make fully operational, four of those refineries this week.
Motiva, a joint venture between Royal Dutch Shell and Saudi Refining, said its Convent, La., refinery restarted Sunday and its refinery in Norco, La., is expected to get started by midweek. Both are located west of New Orleans.
Marathon said over the weekend that its Garyville, La., refinery west of New Orleans should be fully operational early this week. Valero said it's still hoping to restart this week its St. Charles refinery about 15 miles from New Orleans.
When running at 100 percent capacity, these four represent slightly more than 1 million barrels of refined oil product a day.
In contrast, Chevron's 325,000 barrel-a-day refinery in Pascagoula, Miss., and ConocoPhillips' 247,000 barrel-a-day facility in Belle Chasse, La., south of New Orleans have suffered major damage and are unlikely to resume production for some time, according to the U.S. Department of Energy.
The ConocoPhillips facility, along with Exxon Mobil's Chalmette, La., refinery and Murphy Oil's facility in Meraux, La., also have no power. They represent nearly 690,000 barrels a day of refined oil products.
Tricky process
But industry experts say that even after power is restored, restarting an oil refinery is a tricky and time-consuming process. Crews must be meticulous with repeated inspections, checking and rechecking for leaks. They must also ensure that all saltwater has been cleared or risk igniting a fire.
``What you have is an important set of steps in terms of these are high-temperature, high-pressure facilities,'' Felmy said. ``And that's if you have not had any damage, and we know from preliminary reports that's not the case.''
There are also workforce issues. With communication lines either down or overloaded, many companies have not been able to locate displaced employees.
Last week Shell Oil and Valero spoke out about efforts to locate and assist employees. In some cases, it may require providing shelter near the refineries.
Valero estimated that almost 1,000 of its employees may have been affected by the storm, including 550 at its St. Charles refinery, scheduled to restart by week's end.
Monday afternoon, the company said it had heard from all but nine of its employees from the St. Charles workforce. The company has set up a large air-conditioned tent equipped with a catering operation, according to Valero spokeswoman Mary Rose Brown.
Additionally, the company has also dispatched 50 mobile homes to St. Charles for workers who may need temporary housing.
http://www.mercurynews.com/mld/mercurynews/business/12570352.htm?source=rss
Gulf refineries close to restarting
TWO OTHERS HAD MAJOR DAMAGE FROM HURRICANE
By Steve Quinn
Associated Press
JACKSON, Miss. - As half of the Gulf Coast refineries damaged by Hurricane Katrina begin to ramp up production this week, industry experts have this message: Be patient.
``What you've got are a whole series of requirements and processes and that takes days, if not weeks,'' said John Felmy, chief economist for the American Petroleum Institute.
The going is also slow for the restoration of offshore oil and gas production. Almost 70 percent of normal oil production and half of the natural gas output remains shut down, according to the U.S. Minerals Management Service, which said activity is slowly recovering.
Eight major refineries that produce gasoline, diesel and jet fuel and heating oil were knocked out of commission and the output at two others was cut by last week's killer hurricane and the flooding that followed. That cut overall U.S. refining capacity by more than 10 percent and contributed to a surge in retail gasoline prices and spot shortages around the country.
Motiva Enterprises, Marathon Oil and Valero Energy said they hope to restart, and in some cases make fully operational, four of those refineries this week.
Motiva, a joint venture between Royal Dutch Shell and Saudi Refining, said its Convent, La., refinery restarted Sunday and its refinery in Norco, La., is expected to get started by midweek. Both are located west of New Orleans.
Marathon said over the weekend that its Garyville, La., refinery west of New Orleans should be fully operational early this week. Valero said it's still hoping to restart this week its St. Charles refinery about 15 miles from New Orleans.
When running at 100 percent capacity, these four represent slightly more than 1 million barrels of refined oil product a day.
In contrast, Chevron's 325,000 barrel-a-day refinery in Pascagoula, Miss., and ConocoPhillips' 247,000 barrel-a-day facility in Belle Chasse, La., south of New Orleans have suffered major damage and are unlikely to resume production for some time, according to the U.S. Department of Energy.
The ConocoPhillips facility, along with Exxon Mobil's Chalmette, La., refinery and Murphy Oil's facility in Meraux, La., also have no power. They represent nearly 690,000 barrels a day of refined oil products.
Tricky process
But industry experts say that even after power is restored, restarting an oil refinery is a tricky and time-consuming process. Crews must be meticulous with repeated inspections, checking and rechecking for leaks. They must also ensure that all saltwater has been cleared or risk igniting a fire.
``What you have is an important set of steps in terms of these are high-temperature, high-pressure facilities,'' Felmy said. ``And that's if you have not had any damage, and we know from preliminary reports that's not the case.''
There are also workforce issues. With communication lines either down or overloaded, many companies have not been able to locate displaced employees.
Last week Shell Oil and Valero spoke out about efforts to locate and assist employees. In some cases, it may require providing shelter near the refineries.
Valero estimated that almost 1,000 of its employees may have been affected by the storm, including 550 at its St. Charles refinery, scheduled to restart by week's end.
Monday afternoon, the company said it had heard from all but nine of its employees from the St. Charles workforce. The company has set up a large air-conditioned tent equipped with a catering operation, according to Valero spokeswoman Mary Rose Brown.
Additionally, the company has also dispatched 50 mobile homes to St. Charles for workers who may need temporary housing.
http://www.mercurynews.com/mld/mercurynews/business/12570352.htm?source=rss
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