September 5, 2008 at 1:24 pm #3442
9/3/2008 7:32:00 PM
After Escaping Gustav, Idle Refineries Await Return Of Power
NEW YORK (Dow Jones)--Although oil refineries and natural gas processing plants made it through Hurricane Gustav largely unscathed, widespread power outages in Louisiana are keeping them idle. Entergy Corp. (ETR), the largest utility in the state, supplies a key Gulf Coast refining hub with electricity.
Gustav made landfall along the coast of Louisiana on Monday as a Category 2 hurricane, and strong winds inflicted massive damage to power lines. Entergy is beginning extensive repairs to the power grid, an undertaking that will take weeks to complete.
The biggest problem refineries are facing is a lack of power, said Mike Lyons, general counsel for the Mid-Continent Oil and Gas Association in Baton Rouge, La., a regional trade group. “It will be on in the next couple of days to a week,” Lyons said.
“Power is the biggest issue facing the whole state.” Many of Louisiana’s major refineries remain shut down. The Convent, La., refinery operated by Motiva Enterprises LLC, a joint venture between Royal Dutch Shell PLC (RDSA) and Saudi Arabian Oil Co., doesn’t have power and several internal lines have been damaged. “Portable generators to provide electricity to buildings are in place,” Shell said.
“There are no reports of damage to any major processing units, but assessments continue and are expected to be completed (Wednesday). Restart of the refinery will depend on further assessments, repairs that are needed and availability of dependent resources.”
Valero Energy Corp. (VLO) said its 185,000-barrel-a-day refinery in Norco, La., has an unreliable supply of power. The electrical companies have assured the industry that they are doing everything they can to get power back on.
The natural gas industry is experiencing similar problems after surviving Gustav. The U.S. Department of Energy said 22 major natural gas processing plants remain shut down after reporting no major damage. “The loss of commercial power is one of the most significant challenges the plants are facing,” according to an update Wednesday from the department.
Entergy said it has restored power to 90,000 customers since Hurricane Gustav, but is still trying to assess the widespread damage the storm inflicted on Louisiana’s power grid. Entergy said 708,000 customers are without power in the areas of the state the company’s utilities operate, from a peak of 798,000.
Workers have made some progress on the state’s transmission, restoring the flow of power into New Orleans, which had been relying on three nearby plants for power. The company has been able to restore some high-voltage transmission lines, with 175 remaining knocked out.
At the same time, Entergy officials still don’t have a complete assessment of overall damage to the grid, relying on unmanned government aircraft for assistance with aerial inspections Wednesday. Restoration could take weeks in some parts of the state, the company said.
“It is clear a number of lines in the Baton Rouge area particularly have extensive damage with many, many steel towers down,” said Randy Helmick, Entergy’s vice president of transmission. Restoring transmission lines in Baton Rouge and other parts of the state is crucial for oil refineries and natural gas processing plants.
Because of the large amount of power required by refineries and other large industrial customers, these facilities are particularly challenging to restore because of the delicate process of balancing the large demand of the facilities with supplies from power plants over a transmission system with reduced capacity.
“They are very large customers, and you have to be careful when you bring them on,” said Dennis Dawsey, Entergy’s vice president of distribution operations. Entergy officials declined Wednesday to provide an update on which refineries are without power, only saying they’re working with the companies.
They pointed out one advantage in refineries’ favor. Most are hooked directly into the transmission network, so they don’t have to worry about damage on the secondary lines, known as the distribution system, which delivers powers to most homes and businesses.
-By Mark Peters and Susan Daker, Dow Jones Newswires; 201-938-4604; email@example.com
September 5, 2008 at 1:25 pm #6612
This would be good data point for those refineries with captive power supply (Petcoke CFB/Gasifiers) to capture on economics – lost days X Refining capacity idled waiting for Grid to balance out & allow start-up.
I understand the ExxonMobil Baton Rouge Coking Refinery was damaged somewhat by Gustav, but most are ok.
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