News

Severe Cold Hits 3 U.S. East Coast Refineries; Futures Spike

Source: Reuters

February 20th 2015

At least three refineries that account for more than two-thirds of the U.S. East Coast’s output experienced significant disruptions on Friday due to single-digit temperatures that sent the entire Northeast into a deep freeze.

U.S. heating oil futures were up nearly 6 percent as a series of unexpected disruptions curtailed production and threatened a supply squeeze just as home heating demand rises.

Delta Air Lines Inc.’s 185,000-barrel-per-day refinery in Trainer, Pennsylvania, appeared to be hit hardest. It had to cut back production and shut its main gasoline-making unit, a 52,000-barrel-per-day fluid catalytic cracker, two people familiar with the plant told Reuters.

Intelligence group Genscape also reported the FCC was shut down.

The facility’s cooling system normally draws water from the Delaware River, which is partly frozen, with the temperature in Trainer at about 8 Fahrenheit (minus 13 Celsius) on Friday morning. An unknown number of other units were also affected, the sources said.

“There are some units down, but not all are down,” said Adam Gattuso, a spokesman for Monroe Energy, the Delta subsidiary that runs the refinery.

Gattuso would not discuss what units were shut down. Industry publication Energy News Today reported earlier on Friday that the refinery was completely shut.

Phillips 66 was experiencing extended delays in restarting a crude unit at its 238,000-bpd Bayway refinery in Linden, New Jersey, according to person familiar with the facility’s operations.

The company tried to restart the unit on Feb. 11, but problems arose, including recent severely cold weather that froze lines that feed into it, the source said Friday. The unit had been shut down for planned maintenance on Feb. 4.

Energy News Today had first reported the problems at Bayway on Friday.

Genscape reported Philadelphia Energy Solutions Inc. shut down a vacuum distillation unit at the Girard Point section of the 335,000-bpd refinery in Philadelphia.

The refinery had two flaring incidents on Friday, triggering a community alert system.

Safety flares were set off on Friday at Valero Energy Corp’s 180,000-bpd refinery in Memphis, Tennessee, due to problems caused by cold weather overnight, sources familiar with plant operations said.

Production was continuing at planned levels, said the sources and Genscape, which reported the problem.

Frigid temperatures have also prevented boats from docking at the Monroe Energy refinery for up to 36 hours due to frozen fire lines, a third source said. The refinery gets most, if not all, of its crude by water.

The U.S. Coast Guard at the Philadelphia Port said the refinery was reporting 2 to 4 inches (5 to 10 cm) of ice at the dock.

Monroe’s Gattuso said he was not aware of problems at the dock.