September 1, 2012:

HOUSTON - Royal Dutch Shell said on Friday it had restarted its Houma-Houston pipeline and its joint-venture Motiva Enterprises refinery in Convent, Louisiana, was restarting after Isaac. The 235,000 barrels-per-day Convent refinery would run at reduced rates after finishing its startup "while some electrical power issues are resolved," the company said. Motiva Enterprises is a joint venture of Shell and Saudi Aramco.  The 300,000 bpd Houma-Houston pipeline carries crude oil from Houma, Louisiana, to Houston, and is slated to be reversed next year. Motiva's 233,500 bpd refinery in Norco, Louisiana, was expected to begin restarting some units on Friday after shutting down during the storm because of power loss and some wind damage. The company said its Gulf of Mexico pipeline network remained shut, but sections of it could restart over the weekend pending results of aerial inspections. And Shell said all of its product terminals shut for the storm had been reopened and were supplying wholesalers.

Shell's Geismar, Louisiana chemical complex was restarting on Friday and its Saraland, Alabama chemical plant was operating at reduced rates on Friday, the company said.

By Chicago Tribune

August 31, 2012:

The summer of 2012's widespread refinery and petroleum pipeline problems, as one analyst put it, will mean that many Americans will face record high gasoline prices during the long Labor Day holiday weekend. In California, analysts have blamed the recent Chevron Corp. refinery fire as the main reason the state will see a second straight year of the highest average prices ever for the traditional three-day ending of the summer driving season. But the national average for the price of gasoline this weekend will shatter a record set in the summer of 2008, the year that the U.S. saw its highest overall prices ever, even after adjusting for inflation. Analysts blamed a triple whammy of two Midwest petroleum pipeline shutdowns and two major Midwest refinery outages for the start of the U.S. price spike. And prices had only begun to sink after those incidents before Hurricane Isaac kicked them higher again.

"It's been the summer of troubles for refineries," said Tom Kloza, chief oil analyst for the Oil Price Information Service in New Jersey. Kloza said that the flow of fuel from Gulf of Mexico refineries was interrupted by precautionary shutdowns, even though storm damage was minimal. "You can shut down a refinery pretty quickly," said Kloza, "But restarting them will take time. These are sophisticated, billion-dollar assets. It's a little more complicated than flipping the on-switch." In California, the average cost of a gallon of regular gasoline is $4.157, according to the AAA Fuel Gauge Report. That makes it almost certain that the Labor Day weekend will see prices higher than the current holiday record of $3.915 a gallon to $3.973 a gallon, set during the three-day period last year. That's 29.8 cents a gallon higher than the state's average was on Aug. 7, the day after the Chevron refinery fire in Northern California. The Richmond refinery is the state's third biggest of 14 such facilities. It has been operating at less than full capacity since the accident, which is normally about 243,000 barrels of fuel a day.

Nationally, the average for a gallon of regular gasoline is $3.829, which puts it substantially higher than the current Labor Day weekend record of $3.682 a gallon to $3.686 a gallon set in 2008. But travelers aren't likely to change their Labor Day plans at this late date, at least in Southern California, according to AAA spokeswoman Elaine Beno. She added that the Automobile Club of Southern California is expecting 2.35 million people in the region to take trips this weekend, up 3.4% from last year. Beno said 1.85 million of them will be driving, up 3.6% from 2011's numbers. One of them was Dayna Linares, 25, of Venice, who had used her free gasbuddy.com smartphone app to find the area's lowest reported price, which was not very low at all: $4.15 a gallon at the Arco at 4th Street and Pico Boulevard in Santa Monica. Linares and two girlfriends were headed for San Diego for the weekend.

"I'm not getting a receipt. I'm not looking. We're going no matter what," said Linares, a part-time student who has two waitressing jobs, as she filled up her light blue 2009 Toyota Rav4. "I really don't want to know how much it is."

By Los Angeles Times

September 1, 2012:

ONITSHA, Nigeria  - Nigerian oil and gas firm Orient Petroleum said it would begin operating a new refinery in south-eastern Anambra state by the end of next year which will process an initial 20,000 barrels per day (bpd) of crude oil. Nigeria is among the world's top 10 crude oil exporters but has to import most of its refined product needs due to the dilapidated state of its refineries. Previous efforts to build new refineries have often been delayed or cancelled. Africa's biggest oil producer currently has a theoretical refining capacity of 445,000 bpd from its four plants but they process around 30 percent of this amount, oil industry sources have said.  "Our expectation is that the refinery will be up and running by the end of next year," Orient Chairman Emeka Anyaoku said at the inauguration of the project.  "We expect that by the end of next year we should be refining 20,000 barrels of oil everyday and gradually after that we will build up to 35,000 then 55,000 and possibly higher."  Orient is exploring for oil in Anambra state, which sits north of the main oil producing Niger Delta region, but there have been no official oil reserve figures published. The company's website said it will refine crude oil produced from Anambra state and Brass River oil, which is currently pumped from fields operated by Italian firm Eni.

By Reuters

August 31, 2012:

Royal Dutch Shell shut the Norco, Louisiana, refinery that ran at reduced rates when Hurricane Isaac came ashore, the company said on Thursday, but it gave no explanation for why the facility had been shut. The company also said that its Capline crude oil pipeline, with a capacity of 1.2 million barrels per day, had restarted. During the storm, Shell ran the joint-venture Motiva Enterprises 233,500 barrels-per-day (bpd) refinery in Norco, at reduced rates. But on Thursday, the company said the refinery had shut its units while its chemical plant was operating at reduced rates. Shell did not say whether the storm damaged the refinery and did not respond to questions about the matter. "The outcome of these assessments will determine the timeline for a return to full operations," the company said. The storm's threat diminished on Thursday as it moved further inland and weakened into a tropical depression. It came ashore Tuesday as a Category 1 hurricane. Shell shut Motiva's 235,000 bpd refinery in Covent, Louisiana, before Isaac came ashore, and said on Thursday that it would begin restarting. The company did not say when. Motiva Enterprises is a 50-50 joint venture of Shell and Saudi Aramco.

Shell also said on Thursday that it restarted its Capline system, which can transport up to 1.2 million barrels per day from St. James, Louisiana, to Patoka, Illinois. Valero Energy Corp's was running its 180,000 bpd refinery in Memphis, Tennessee, at reduced rates because of the Capline shutdown. Valero spokesman Bill Day said late Thursday that the Memphis plant was still running at reduced rates. Shell's offshore Gulf of Mexico pipeline network and its Houma-Houston pipeline remained shut down, but the company said it may conduct aerial inspections of those facilities on Friday if weather permits. The company also said its terminals at Convent and Collins, Mississippi, had reopened, while its Kenner, Louisiana terminal remained shut. Of Shell's chemical plants affected by the storm, its complex in Geismar, Louisiana, was to begin restarting while its plant in Saraland, Alabama, continued to run at reduced rates on Thursday.

By Reuters

August 31, 2012:

The U.S. Department of Energy loaned 1 million barrels of Strategic Petroleum Reserve oil to a refining company Friday as it and others tried to return to normal operations after a storm named Isaac drenched the Louisiana coast. Marathon Petroleum Corp. received a loan of sweet crude it had requested because of supply constraints caused by Isaac, which continued moving inland as a tropical depression Friday after making landfall Tuesday as a Category 1 hurricane. The loaned oil is different from a release of Strategic Petroleum Reserves and will have to be paid back with the equivalent amount of oil, plus "premium barrels" similar to interest, the Energy Department said. Marathon spokesman Shane Pochard said the loan "will help supply our refining system due to shortages from Hurricane Isaac." Meanwhile, oil companies began moving back into the Gulf of Mexico amid estimates that Isaac could cost the industry as much as $1 billion in lost production and damages. Several companies said they expect to restart production within a few days, although they noted that it will depend on inspections of each platform and other infrastructure.

Refineries lining the Gulf Coast also continued inspections, and analysts said it could be a week or longer before most resume production. "People think taking a refinery down and restarting it is like turning your car off and turning it back on, but it's a bit more complicated," said Tom Kloza, chief oil analyst for the Oil Price Information Service. That could have been one of the reasons for the government oil loan, since it may help Marathon keep its 490,000-barrel-per-day refinery in Garyville, La., from further reductions in operations, said John Parry, a principal analyst for IHS Herold. The refinery had been running at lower rates because of the storm. "It's best to keep the refinery running as full out as you can because when you throttle back the inputs, you are affecting other operations," Parry said. The oil loan probably will supplement on-site supplies and keep the refinery running efficiently for a week or more, he said. It also will help the refinery take advantage of higher margins if it can churn out more gasoline, diesel and other refined products while other facilities are offline or restarting.

Still rising

Kloza said gasoline prices may continue to rise over the next 48 hours because of the reduced refinery capacity, but he added they could drop as much as 50 cents a gallon by year-end. The average price of a gallon of regular gasoline nationally Friday was $3.83, according to AAA, up less than a penny from Thursday. In Houston, the average pump price also was up a fraction of a cent at $3.65.

Not yet restarted

Valero Energy Corp. said its Louisiana refineries in Meraux and St. Charles remain shut down, although operations employees were scheduled to return over the weekend to plan the restart process. Valero spokesman Bill Day said there is not yet a timetable for restarting. The company's Memphis, Tenn., plant, which had been operating at reduced rates because Shell's Capline pipeline from the Gulf was shut down, is increasing toward planned production rates now that the Capline is flowing again, Day said. Phillips 66 said its Alliance Refinery in Belle Chasse, just outside New Orleans, remained shuttered Friday. That plant lost power and was flooded during the storm, and the company said floodwaters were receding on Friday. It expected more than 100 employees to report to work by the end of the day, along with additional emergency generators, fuel and supplies. The company's Lake Charles Refinery in Westlake, La., remains in operation.

More demand possible

Kloza noted that Gulf Coast refineries may see increased demand for gasoline and diesel for South American markets because of a huge fire at a Venezuelan refinery that killed dozens of people.

By Chron.com