Recently restoed La refineries in jeopardy.
Dow Jones News Services 12:47PM
NEW YORK (Dow Jones)--In addition to shutting down 13 oil refineries in Texas, Hurricane Rita has become a burden for the Louisiana refineries hit by Hurricane Katrina.
four refineries that have restarted from their Katrina-related shutdowns face crimps in the supplies of crude oil and natural gas they need to keep running, and at least two of the three facilities that are still off line have been forced curtail repair work amid threats of new flooding.
Hurricane Rita, steaming through the Gulf of Mexico with 135 mile per hour winds on a course for the eastern Texas coast, has shut key oil pipelines and also the Mississippi River, an important source of crude oil for refineries.
According to the U.S. National Hurricane Center, the storm also will bring tides 3 to 5 feet above normal and large waves to Louisiana. In addition, the storm could dump 3 to 5 inches of rain on New Orleans.
Engineers said the badly damaged levees in New Orleans can handle only up to 6 inches of rain and a storm surge of 10 to 12 feet, The Associated Press reported.
In neighboring St. Bernard Parish - home to the 183,000 barrel a day Chalmette refinery owned by Exxon Mobil Corp. (XOM) and Petroleos de Venezuela S.A. (PVZ.YY), and Murphy Oil Corp.'s (MUR) 120,000 barrel a day Meraux refinery - a surge of 5 to 6 feet would be all that was needed to swamp the area again, AP reported.
"We're concerned about it," Murphy spokeswoman Mindy West said Friday. The company had to evacuate the clean-up crew from the Meraux refinery Tuesday and doesn't expect to be back in again until Monday. The refinery already was expected to be down for months.
The main concern is the levees, West said. Already Friday, steady rain from Rita opened three significant breaches in New Orleans' levee system, AP reported. Dozens of blocks in the Ninth Ward were under water, the AP said.
Water from the Ninth Ward, in turn, was creeping into St. Bernard Parish, but officials thought raised railroad tracks might keep the water out of much of the parish, the New Orleans Times-Picayune reported Friday.
Hurricane Rita's storm surge has begun to push water into Plaquemines Parish south of Port Sulphur, the paper reported. Port Sulphur is about 40 miles southeast of Belle Chasse, home to ConocoPhillips' (COP) 247,000 barrel a day Alliance refinery.
Motiva Enterprises, the joint venture of Royal Dutch Shell PLC (RDSB.LN) and Saudi Arabian Oil Co. (SOI.YY), was closely watching the situation at its 240,000 barrel a day Norco and 225,000 barrel a day Convent refineries.
Convent is well stocked with crude to process, but is concerned about its supply of natural gas, spokesman Gary Miller said Friday.
Marathon Oil Corp. (MRO) is running its 245,000 barrel a day Garyville refinery at normal rates now and typically has crude oil in storage, according to spokeswoman Angelia Graves. She declined to comment on quantities of supply currently on hand.
Rita has shut 16 refineries in Texas and southwestern Louisiana. Taken together with the four refineries still down in the wake of Hurricane Katrina, fully 28% of U.S. fuel-making capacity is off line.
Outages may not be as long-lasting as the months-long shutdowns caused by Katrina's catastrophic flooding. But the hit to facilities spared by that first storm is still one the country can scarcely afford.
"There's a risk we could have substantial impact on further refineries," Guy Caruso, head of the federal Energy Information Administration, said Wednesday. "Clearly, we cannot afford any further disruption to gasoline production." |
