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Status Of Gulf Refineries, Pipelines Slowly Improving

September 27, 2005
Though oil and gasoline facilities in the Gulf of Mexico escaped major damage from Hurricane Rita, disruptions in oil production and supply exist, according to industry analysts. Of greatest concern to short-term needs is disruption of gasoline supplies from Gulf refineries.

On Monday, the American Petroleum Institute reported:
• As of September 26, 23.4 percent of the nation’s refinery capacity was off-line. Another 3 percent of U.S. capacity was operating under reduced runs. Most of the refineries in the hurricane’s path were still assessing their facilities for possible damage to determine when they can be brought back on line.
• The following refineries were reported as shut down, with no information yet as to when they might restart, or on the extent of damage incurred, if any: Valero (Texas City), Astra (Pasadena), Valero (Houston), Lyondell-Citgo (Houston), Calcasieu (Lake Charles) and Total Petrochemical (Port Arthur).
• Refineries reporting having no power are Motiva in Port Arthur and ExxonMobil in Beaumont.
• The ExxonMobil refinery in Baytown, the ConocoPhillips refinery in Sweeney and the Marathon Petroleum refinery in Texas City were asking employees to report to work to start up the facilities.
• The Shell refinery in Deer Park suffered no significant damage and expects to be running by Wednesday or Thursday.
• The Valero refinery in Port Arthur reports flooding and a lack of electricity, and it expects to be running in two to four weeks.
• Refineries reporting no significant damage but offering no estimate on when they might restart are the BP Texas City facility and the Citgo Lake Charles plant.
• The Citgo Corpus Christi refinery is running at normal operations while the Flint Hills Resources and the Valero facilities were returning to normal operations but running at reduced capacities. The Valero Three Rivers (near San Antonio) refinery is operating at slightly reduced runs and returning to normal operations.
• There are still 4 Katrina refineries down, representing a little more than 5 percent of U.S. refining capacity (ConocoPhillips-Belle Chasse; ExxonMobil-Chalmette; Murphy Oil-Meraux; and Chevron-Pascagoula).

Pipelines, another critical component of the energy infrastructure, were also impacted by Hurricane Rita. The Capline pipeline, which connects the Louisiana Offshore Oil Port and the Strategic Petroleum Reserve and Patoka, Illinois, is operating at about 75 percent capacity, according to the Association of Oil Pipelines. But the Centennial Pipeline, originating in Beaumont, Texas and terminating in Creal Springs, Illinois, remains completely shut down.

As of Monday, the status of other pipelines in the region was mixed:
• Colonial Pipeline: Operating. Colonial has restarted its origin pipeline segments in Houston and Pasadena and continues to have full operating capacity from Krotz Springs, LA, eastward. This will enable the pipeline system to achieve 42 percent of its normal mainline operational capacity from Houston. It plans to increase its capacity to 54 percent Monday and 73 percent Tuesday.
• Explorer Pipeline: Partial operations. Limited service resumed early Monday morning after an integrity assessment and an orderly restart. Limited service has been restored from the company’s Pasadena and Houston facilities, which provide two-thirds of the company’s normal volumes. The company’s origin facility at Lake Charles has not yet been assessed and the origin facility at Port Arthur is not yet ready to resume operations. Explorer operates a 1,400-mile system that transports some 573,000 b/d of gasoline, diesel fuel and jet fuel from the Gulf Coast to the Midwest.
• Longhorn Pipeline: Closed. A 700-mile pipeline, Longhorn can transport up to 72,000 b/d of refined products. The pipeline transports gasoline and diesel from Gulf Coast refineries to communities in West Texas and the El Paso gateway market. From there, some fuel is sent to Phoenix, Tucson and Albuquerque.
• LOOP: Partial operation. The port stopped offloading tankers Thursday but it is continuing to deliver crude to customers. LOOP is the U.S. port capable of off-loading deep draft tankers known as Ultra Large Crude Carriers (ULCC) and Very Large Crude Carriers (VLCC).
• Magellan Pipeline: Operating, with portions closed. Magellan is a refined products system consisting of 8,500 miles of pipeline providing transportation, storage and distribution services for refined petroleum products and liquefied petroleum gases in 13 Midwestern states. The system in Texas and southern Oklahoma is idle because of lack of supply from Houston. All other refinery origins on the Magellan system are operational and are expected to maintain normal supplies to mid-west markets.
• Marathon Pipeline: Portions closed. Marathon shut down its Texas City to Pasadena system as of late Wednesday. The remainder of the onshore system is operational.
• Plantation: Operating. Plantation is a refined products system consisting of 3,100 miles of pipeline transporting 595,000 b/d. The line originates in Baton Rouge and terminates in the Washington, DC area.
• Seaway Pipeline: Closed. Seaway operates a 500-mile system that transports 350,000 b/d from the Texas Coast to Cushing, OK.
• TEPPCO Products Pipeline: Closed. All TEPPCO refined products and liquid propane gas terminals have been shut down. TEPPCO operates a 4,600-mile system that transports 330,000 b/d of refined products from Beaumont to New York. It consists of two main lines that have been shut down. TEPPCO's 16-inch line from El Dorado, KS north is available to run on a very limited basis for conventional refined products but will depend on local sources for its supply.

The Gulf of Mexico provides 29 percent of domestic oil production and 19 percent of domestic natural gas production. As of Monday, September 26, the combined shut-ins associated with Hurricanes Katrina and Rita were: 100 percent of oil production from the Gulf (1.53 million barrels per day) and 78.4 percent of daily natural gas production (7.84 billion cubic feet per day).

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