Hurricane Recovery: What Refiners Face and How Long It Might Take
opisnet.com
Just how long will badly damaged or flooded Louisiana and Mississippi refineries be down?
September 8, 2005
There's no shortage of rhetoric on what needs to be done, how long it will take, and the obstacles to be overcome in restoring a sense of normalcy to Katrina-impacted refineries. But the commentary emanating from regulatory press offices or refinery PR spokespeople is muddied by sensitivity to the human elements and spin from those with a vested interest. With that in mind, OPIS staff talked to refining veterans who had dealt with significant storms that hit Gulf Coast plants in recent years.
Ten days after Katrina raked the Gulf, experts say it's clear that it will take six weeks to two months before a number of plants are able to restore operations. They add that for a select few refineries, it could even take four to six months before operations reach pre-Katrina levels. These assessments are based on on-site dynamics, and not on the availability of refinery feed.
The good news: Valero's 157,000 b/d St. Charles refinery, Motiva's 255,000 b/d Convent refinery and 240,000 b/d Norco refinery, and Marathon's 255,000 b/d Garyville refinery, all near New Orleans, are likely to see full operations restored by early next week or sooner, refining experts tell OPIS.
But Murphy's 125,000 b/d Meraux refinery, Chalmette Refining's 195,000 b/d plant, ConocoPhillips' 260,000 b/d Alliance refinery, and Chevron's 350,000 b/d Pascagoula, Miss., refinery, "could take months to bring back," experts speculate. All of these companies are at present unable to give any reliable estimates of downtime and here's why:
For large refiners and petrochemical plants, total downtime as a result of a major hurricane can be as little as a week if the storm does no damage to a facility or connected infrastructure. This was the case for many refiners who took precautionary shutdowns ahead of Andrew's 1992 landfall.
But the restoration of absolutely critical infrastructure and support systems--including running water, electrical power, and sewer systems outside the refinery fence- - is still tied to an unknown future date. Inside the refinery fence, systems such as the waste water treatment facilities and holding ponds that have been flooded will have to be restored. This can take several weeks, but the key to operations lies outside the refinery fence, sources said.
Typically, refiners begin to inspect their facilities almost immediately after the storm has passed. But in some cases, refiners have yet to be able to inspect their facilities due to extensive flooding and lack of personnel.
Once refiners are able to access their facilities, they will begin checks on valves, seals, pump and compressors, and will conduct numerous tests required before operations can restart if a plant was completely shut down. Typically this takes a couple of days to accomplish.
Water is likely to be the major source of damage for refiners in the wake of Katrina, not wind damage. In fact, there have been no reports of wind damage to date to any refining units from Katrina. But flood damage is expected to be significant.
"The longer equipment is in standing water, the more extensive the damage," one engineer said. All electrical pumps, seals, and compressors that have been submerged will have to be replaced or rebuilt. Each refinery has hundreds of such pieces of equipment.
If specialty pumps and compressors, typically associated with complicated conversion units such as FCCs or very large capacity units, have been damaged beyond repair this is likely to present a real problem for refiners, as these are typically custom built and manufactured to order, and are not "off the shelf" items.
Compressors for major processing units such as FCCs, and specialty pumps and compressors, are typically elevated and may have escaped flooding. But even if they are high and dry, refiners are likely to take such units apart and inspect every inch and lubricate before attempting to restore their operations, sources said.
There have been reports that various refinery units, such as crude units and catcrackers, had standing water in them. As dire as this sounds, experts told OPIS that it "really doesn't matter," and the key to restart is in the pumps, valves, compressors, and of course, the control rooms.
Many pumps in a refinery are "generic" or "off the shelf" and can be quickly replaced and are widely available. In the wake of Katrina, however, demand for such equipment is likely to be high, which will result in backlogged orders and lengthier replacement schedules on the order of a week or more as opposed to a day or two.
Most control rooms are at ground level, though refiners try to site them on the highest available land within the facility. Most of the wiring for control panels runs through the ceiling, and most control boards are at table or desk height, so some may have escaped if flooding was relatively minor. But flooding of more than a few feet is going to prompt refiners to have to replace control panels. Again, most control systems are "off the shelf", sources said, but can take weeks to reestablish.
Chevron's Pascagoula refinery suffered extensive control room damage in the wake of Hurricane Georges (1998), prompting a shutdown of several months. Chevron has reported that damage from Katrina was minimized by construction of dikes to control flooding after Georges.
For several New Orleans area refiners, inspections have been difficult and incomplete at best and impossible at worst due to ongoing flooding that has made access limited or non-existent. Indications are that flooding will remain a factor for weeks, and restoration of outside facilities will take months, before refiners can begin to restore operations at these plants.
Workforce issues are also a problem, with some refiners unable to field enough personnel due to the widespread destruction of housing. Chevron has taken the step of planning for a "tent city" to house upwards of 1,500 refinery personnel and their families near Pascagoula, but for those south of New Orleans this option doesn't seem feasible.
The bottom line in the wake of Katrina is that the industry is in uncharted waters, industry veterans agree. In the past, major storms have inflicted serious damage to only one or two facilities at a time. All of the estimates about downtime for the four most seriously impacted refineries are just that, estimates. The clock measuring downtime for the most directly hit plants is not synchronized. Each facility is likely to be restored on a timeframe that's unique to the local conditions, and it's those local elements that will dictate whether units make a contribution in October, November, or later. |
