Wood River refinery trims flow
Tuesday, September 27, 2005
Printable FormatBy Jeffrey Tomich
ST. LOUIS POST-DISPATCH
ConocoPhillips said it won't delay a 1 1/2-month-long maintenance outage at its Wood River refinery, a key supplier of fuel to the St. Louis area, despite urging by President George W. Bush and other elected officials that oil refiners put off such projects.
The Houston-based oil company said it will shut two units at the 306,000-barrel-a-day plant on Thursday. The project will cut gasoline production by about 20 percent, 30,000 barrels a day, but won't affect diesel or jet-fuel production, refinery spokeswoman Melissa Erker said.
ConocoPhillips had pushed back the project's start after Hurricane Katrina sent the average nationwide price of gasoline soaring above $3 a gallon. But the company said further delays could jeopardize safety. "If we could push this back we would," Erker said.
Normally, routine refinery maintenance wouldn't cause concern about prices and supplies. But two major hurricanes in less than a month struck a major blow to Gulf Coast oil platforms, refineries and pipelines, further aggravating tight energy markets.
The project at Wood River, the nation's 10th largest refinery, could be especially significant to St. Louis. Work is to begin the same day that a key pipeline that supplies the metropolitan area and elsewhere in the Midwest is to resume gasoline deliveries after being closed for a week.
The 1,400-mile Explorer Pipeline between Lake Charles, La., and Hammond, Ind., was shut to allow workers time to evacuate before Hurricane Rita. It partially re-opened Monday, but some major refineries that rely on Explorer to transport fuel to the Midwest are still down.
Motiva Enterprises LLC said its 275,000 barrel-a-day Port Arthur, Texas, refinery sustained wind damage and flooding; no start-up date was given. Valero Energy Corp.'s 250,000 barrel-a-day refinery there suffered "extensive" damage and isn't expected to resume even partial operation for two weeks, the company said. And Citgo Petroleum Corp.'s 324,000 barrel-a-day Lake Charles plant remains without electricity.
Bush said on Monday that Americans should conserve fuel and asked oil companies to put off maintenance for four to six weeks, unless doing so compromised safety.
Sen. Barack Obama, D-Ill., sent ConocoPhillips Chief Executive James Mulva a letter on Monday with a similar request. "The shutdown could exacerbate the problems with reduced refining capacity," the letter said.
ConocoPhillips shares Obama's concerns, Erker said. But refineries can run only so long before units must be shut for maintenance.
"We want to be able to ensure reliable, long-term supplies for our customers," she said. "And we have already pushed the life cycle of the operating units as far as what we think we can."
A secondary concern for ConocoPhillips: ensuring that there are enough workers to do the job. Battered, flooded refineries in Texas and Louisiana probably will need extensive work in coming weeks and months, which could limit availability of labor.
Prices rise
Concern about how long Gulf Coast refineries will be shut spurred further increases in wholesale gasoline prices on Tuesday, and that carried over to area pump prices.
Gasoline futures for October delivery, which are based on wholesale prices, rose 3.7 cents to $2.17 a gallon on Tuesday. Retail prices typically are 50 to 70 cents above the wholesale price.
The average retail price for a gallon of unleaded in the region rose about 7.5 cents a gallon on Tuesday to $2.77, AAA Missouri spokesman Mike Right said. The increase is the first since Rita struck butwell below the record of $3.14 a gallon set earlier this month.