04-12-07 by dugan
Sheesh. We thought we’d heard every excuse. ConocoPhillips’ giant gasoline plant in Wilmington is shut down and can’t be repaired because… the nitrogen truck is late. California wholesale gasoline is up 16 cents a gallon on that news. Read the whole story from Dow Jones newswires below.
It more than confirms my analysis yesterday about why cutbacks in gasoline manufacturing equal big profits for the oil industry. As onother local oil-watcher put it, "Next they’ll shut down for lack of coffee."
2nd UPDATE: Conoco’s Wilmington Gasoline Unit Shut -Official (Dow Jones)
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· (Adds confirmation from environmental regulator)
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¶ HOUSTON (Dow Jones)–ConocoPhillips (COP) reported that a key gasoline-producing unit at its Wilmington, Calif., refinery broke down late Wednesday, according to Tina Cherry, a spokeswoman for a local environmental agency.
¶ The company declined to comment on the refinery’s operations.
¶ Cherry said the company told the Los Angeles-area Air Quality Management District that it had initiated a break-down investigation into the fluid catalytic cracking unit at the refinery.
¶ A person familiar with the plant’s operations said the unit shut after a welded joint on a line between the unit’s reactor and furnace cracked.
¶ To repair the joint, all of the product currently in the line must be purged, the person said. That effort will require nitrogen, which the refinery is still waiting to receive. The truck bringing the nitrogen failed to arrive overnight as scheduled, the person said.
¶ After the nitrogen arrives, if efforts to repair the joint go smoothly, the unit should restart in 24 to 48 hours, the person said.
¶ "With all the scheduled shutdowns going on, it makes it harder to get equipment," the person said, explaining why the nitrogen had been delayed. Planned and unplanned shutdowns across the region have been significant, according to weekly reports from the U.S. Energy Information Administration, the statistical arm of the Department of Energy.
¶ The outage comes at a time when California refinery utilization levels are low, at 81.9% of total capacity, according to EIA data released Wednesday.
¶ The outage caused a price hike in the California spot market, according to trading sources. The premium of California-grade gasoline over gasoline prices on the New York Mercantile Exchange rose 16 cents above Wednesday’s close.
¶ The Wilmington refinery, located in the Los Angeles basin, has the ability to process 139,000 barrels a day of crude oil. It is a mid-sized refinery, ranking as the eighth largest of California’s 21 crude oil refineries.
¶ The sources couldn’t say how long the fluid catalytic cracker would be shut.
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¶ -By Jessica Resnick-Ault and Ken Clark, Dow Jones Newswires