zman’s Energy Brain

oil, gas, stocks, etc…

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Snafu

Please post any energy snafus here. Fires, outtages of any kind, major leaks, sunken rigs, etc, etc,

As of February 25, 2007: this was the short list of  annoying but short term events.

  • VLO refinery: McKee, Tx 158,000 bopd refinery still “several weeks away from restart.”
  • Imperial refinery outtage: Expects to run it’s 118,000 bopd capacity Ontario refinery at reduced rates through mid March. Serious shortages and the closure of several filling stations have been reported in the greater Toronto area.
  • BP’s Northstar Field In Alaska: 47,000 bopd offline since around Feb 17th and won’t be up for a few weeks as far as I can tell. If it’s not one BP field it’s another. I’d say statements like that are unfair since they have so many fields but then you read stories about how management opted to substitute water for corrosion inhibiting chemicals and I gotta yell come on!
  • Houston Ship Channel: The Channel was shut due to Fog last Thursday. If you’ve ever driven into Houston at high speed before dawn you know fog there is no joke. No word yet as to when it will or if it has indeed reopended. This could easily prompt a draw in crude inventories this week and a bigger one next week if the waterway is not quickly reopened.
  • Elk Hills is slowly returning to normal capacity of 120,000 bopd after a 20 day outtage due to a natural gas explosion in the field.

31 Responses to “Snafu”

  1. […] Snafu […]

  2. […] price of oil see the section entitled “Snafu watch” later in this post or visit the new Snafu tab if you can’t […]

  3. El Diablo said

    The SNAFU tab is an excellent idea and a great reference. Would it be possible to preface each entry with the date that it was included? It would help to quickly distinguish ‘stale’ events from recent ones, and if sorted chronogically (newest first) would highlight real ‘news’. (feel free to tell me to stop making suggestions if you’ve had enough)

  4. zmann said

    EL D- Good idea. I can edit new editions into the post and sort by date. I leave the old resolved ones in as well with dates as a reference for impact but makrct but mark them as completed.

    Please continue to make suggestions.

  5. zmann said

    from Bloomberg: Valero Energy Corp.’s McKee refinery, which was shut after a Feb. 16 fire, is expected to resume operations in early April, a company spokeswoman said yesterday. Processing capacity at the plant, near Sunray, Texas, will be an estimated 160,000 barrels of oil a day, down from 170,000 prior to the fire, Valero’s Mary Rose Brown said.

  6. […] begin to sort themselves out (that’s code for fall) in the next few weeks as a number of snafu are fixed and refinery utilization slowly climbs out of its current maintenance season induced lull […]

  7. […] Snafu […]

  8. […] this is the gasoline rally and they’re right.  That rally has been powered by a long list of infrastructure issues from refinery fires to fog shrouded […]

  9. El Diablo said

    This morning, CNBCheerleaders were reporting that a couple gulf-coast shipping terminals were closed due to high winds. Obviously, a ‘normal’ occurance, but they are being ‘fed’ this line by bullish speculators.

  10. El Diablo said

    February 27, 2007 (Reuters, 12:58) Valero Sees McKee Restart in Early April at About 85,000 b/d

    On February 26, Valero announced that a partial restart of its McKee refinery could be achieved by early April. Valero believes that the refinery could be producing 55,000 b/d of gasoline and 20,000 b/d of distillates with a total output of 85,000 b/d. To achieve that rate of production, Valero hopes to have the crude unit, alkylation unit, reformer, fluid catalytic cracking unit and one of the sulfur recovery units re-commissioned and in operation. The refinery was damaged by a massive explosion and fire on February 16. Under normal conditions, the refinery has a
    capacity of 170,000 b/d.

  11. El Diablo said

    March 2, 2007 (Reuters, 10:48) Restart at Shell’s 334,000 b/d Deer Park Refinery in Texas to be Complete by Early Next Week

    Shell announced that the restart of its 334,000 b/d Deer Park refinery in Texas will be complete by early next week at the latest. Thus far some 270,000 b/d of processing equipment has successfully restarted following a major overhaul. The refinery is jointly owned by Shell Oil and Mexico’s state oil company, Pemex.

  12. El Diablo said

    And finally, a RIDICULOUS example of refinery hysteria:

    March 6, 2007 (Reuters) Animals Blamed for Power Outages at Los Angeles Area Refineries

    According to Reuters, the power failures that affected ExxonMobil’s 155,000 b/d Torrance refinery and Shell’s 100,000 b/d Wilmington refinery late Sunday night were caused by separate incidents involving animals in substations. A Southern California Edison substation in Torrance tripped offline at about 9 p.m. PST when the facility was shorted out by an opossum, cutting power to the ExxonMobil’s refinery and causing a two-hour disruption in operations. A Los Angeles Water and Power substation in Wilmington tripped offline at about 10:20 p.m. PST due to a raccoon. The shutdown interrupted operations and caused flaring at the Shell refinery. Valero’s nearby asphalt plant in Wilmington was also affected by the outage, but its main motor fuels refinery five miles away was not affected.

    PRICES OF GASOLINE in the Los Angeles wholesale market JUMPED 7 CENTS ON THE NEWS of the outages.

    http://www.publicbroadcasting.net/wned/news.newsmain?action=article&ARTICLE_ID=1049213

  13. […] Watch: Reader El Diablo said it all here. My two cents, traders will grasp at the 35,000 bopd shut in at China’s second largest oil […]

  14. El Diablo said

    March 6, 2007 (Reuters, 17:18) BP’s Texas City Refinery Operating at 248,000 b/d; ramping to 400,000 b/d by End of Year

    BP announced that production levels at the refinery are currently averaging 248,000 b/d while continuing to build towards an estimated 400,000 b/d average production level for the fourth quarter of this year.

    March 6, 2007 (Reuters, 14:06) BP’s 260,000 b/d Los Angeles Refinery in California running at 70 Percent

    The fluidic catalytic cracking (FCC) unit has been running at 70 percent for the past two weeks. Planned and unplanned work is ongoing at the refinery at present.

    March 7, 2006 (Yahoo) FCC Restart Delayed at Tesoro’s 166,000 b/d Golden Eagle Refinery in California

    Tesoro announced the delay of the restart of a fluid catalytic cracking (FCC) unit at its Golden Eagle refinery in northern California. The unit had been restarted on February 26 following a planned maintenance outage but was taken offline again on March 3, when a mechanical circulation problem developed. Tesoro will continue operating in a planned maintenance mode until repairs are completed around the middle of this month. http://biz.yahoo.com/bw/070307/20070307005572.html?.v=1

    March 7, 2007 (Reuters, 12:42) Restart Continues at Shell’s 100,000 b/d Los Angeles Refinery in California

    The refinery was shut Sunday when a raccoon caused a substation feeding the plant to trip offline.

  15. El Diablo said

    March 7, 2007 (Bloomberg News, 12:56) Fire Cuts Production at Petro-Canada’s 135,000 b/d Edmonton Refinery March 6

    The fire started yesterday morning and was quickly extinguished. The refinery is currently running at 85 to 90 percent of capacity.

    March 7, 2007 (Reuters, 10:45) Imperial Oil’s 118,000 b/d Nanticoke Refinery in
    Ontario up to 75 Percent

    The company said today it still expects to be fully operational by mid-March. The refinery was damaged by fire on February 15.

    March 7, 2007 (Reuters, 13:00) Shell Restarts 250,000 b/d Bengal Product Pipeline in Louisiana

    The pipeline was shut on January 31, when a small leak was discovered.

  16. El Diablo said

    UGGGHHH-From the “Do traders write this stuff for the EIA” Dept:

    March 7, 2007 (Oil Daily) EIA Sees Tighter Gasoline Market on Increasing Demand Faster Decline in Stocks

    On March 6, the U.S. Energy Information Administration (EIA) indicated that rising demand and larger than normal withdrawal of gasoline stocks, will result in the tightening of the U.S. gasoline market as the summer driving season approaches. Consequently, EIA is predicting an increase of approximately 40 cents per gallon in the price of gasoline between now and the summer driving season. (No mention of how much of the 60 cent climb since 1/26/07 was for this same reason….guess that was due to something else)

  17. El Diablo said

    Finally, the GOOD NEWS for the day:

    March 7, 2007 Pemex Estimates Deep Gulf of Mexico Crude Oil Potential at 29.5 Billion Barrels

    Pemex, the state-owned Mexican oil company, announced its latest estimate for potential crude oil production from deepwater Gulf of Mexico fields to be as high as 29.5 billion barrels. (For perspective, the US has TOTAL reserves of 22 billion barrels)
    http://powermarketers.netcontentinc.net/newsreader.asp?ppa=8kowu%5D%5BlpmiinnSSjh%216%3C%22bfem%5Ev

  18. El Diablo said

    ******A FINAL WORD OF CAUTION******

    I intend to keep ‘reporting’ these ‘outages’ daily, but all readers should be aware that the number of outages we are currently experiencing ARE STATISTICALLY NO DIFFERENT THAN ANY OTHER TIME IN HISTORY. There is a tremendous number of rigs, pipelines, and refineries at work every day to supply the world’s oil. These are all machines, and they all routinely break. The only difference in the oil market today is that CNBC/Wall Street Journal is reporting each ‘break’ as if a major disruption has occurred, and speculative traders are acting as if that’s the case. In fact, these disruptions have occurred and will continue to occur every day that we pump oil, even long after the speculators have been flushed from the market.

  19. […] Watch: Reader El Diablo said it all here. My two cents, traders will grasp at the 35,000 bopd shut in at China’s second largest oil field […]

  20. […] Snafu […]

  21. […] Falling. $60 Floor Failure. As the refining industry snafus sort themselves out and OPEC prepares to meet in Vienna oil is starting to retreat. I’m […]

  22. […] Falling. $60 Floor Failure. As the refining industry snafus sort themselves out and OPEC prepares to meet in Vienna oil is starting to retreat. I’m looking […]

  23. El Diablo said

    DON’T BE ALARMED, FOLKS, JUST A DOSE OF REALITY–HERE ARE HEADLINES FROM A YEAR AGO, 2006 (March 14). FUNNY. SAME ‘PROBLEMS’ RIPPED PRICES BACK THEN, WHAT WAS THE ACTUAL SUPPLY IMPACT? ZILCH. ZERO. NO SHORTAGES LAST ‘DRIVING SEASON’, NOR WILL THERE BE THIS YEAR….READ ON: (Of course, my fav is the ‘iran’ nuclear fears!!!!)

    Crude Prices Jump; Gasoline Up 7 Percent on Outages, Supply Concerns
    A combination of factors resulted in a surge in oil and gasoline prices. The spot price for crude oil closed at $63.10 while the price of gasoline surged by seven percent to close at $1.866 a gallon, the highest price in five months. The increases reflect a number of issues including: a 100,000 b/d upward revision of the volume of oil taken out of production by the string of recent attacks by militants in Nigeria; concern over the adequacy of supply to meet upcoming summer demand as MTBE is phased out in a number of states; concern over Iranian threats relating to their nuclear program; and the impact of a prolonged outage of a major gasoline production unit at a refinery in the Virgin Islands.
    Reuters, 15:46 March 14, 2006.

    Cat Cracker Shut at 495,000 b/d Hovensa Refinery in Virgin Islands for Two Weeks
    A 115,000 b/d capacity catalytic cracking unit at the 495,000 b/d refinery was shut down on March 11 so that unscheduled work could be performed. According to a company representative, the company is assessing mechanical issues and has the goal to restart the gasoline production unit in two weeks.
    Reuters, 10:55 March 14, 2006.

    Nigeria Adds 100,000 b/d to Production Outage Figure from Attacks – Now 556,000 b/d
    Nigeria’s petroleum minister announced that the volume of crude oil production shut by the series of recent attacks on oil facilities has been revised upward by 100,000 b/d to include third party production also impacted by the outage of the Shell facilities.
    Reuters, 07:29 March 14, 2006.

    FCC Unit at BP’s 260,000 b/d Carson Refinery Seen Back Soon
    BP Plc reduced production at its 260,000 b/d refinery in Carson, California over the past weekend to repair a problem with the fluid catalytic cracking unit. The outage affected gasoline output at the refinery. BP anticipated that the repairs would be completed late on March 13.
    Reuters, 15:31 March 13, 2006.

  24. […] Is Depressed By A Plethora Of Snafus. The first is the unusually low levels of refinery utilization the US is experiencing at present. […]

  25. El Diablo said

    At the risk of perpetuating this ‘news fixation’ on ‘normal’ refinery outages, I will keep posting so that all have the benefits of the details…

    March 13, 2007 (Reuters, 17:30) Valero Cuts Output from 100,000 b/d FCCU St. Charles Refinery in Louisiana
    The company said that repairs to the fluidic catalytic cracking unit (FCCU) and the flue gas cooler would cause a loss in production of 85,000 b/d of gasoline and 15,000 b/d of distillate over the next 10 days. According to traders the FCCU was shut for unplanned maintenance and expected to be out of service for two weeks.

    March 14, 2007 (Bloomberg News, 09:13 ) Steam Problem Shuts Boilers at Shell’s 156,000 b/d Martinez Refinery in California
    A “steam problem” shut boilers at the refinery, leading to flaring from the catalytic cracking unit. The company is working to restart the boilers.

    March 14, 2007 (Reuters, 08:19) Sabine-Neches Waterway in Texas Remains Shut; 14 Ships Waiting
    The U.S. Coast Guard reported the Sabine-Neches Waterway was still closed to tankers north of Port Arthur, Texas, early Wednesday (March 14) as salvage crews began clearing 1,650 tons of rock and two barges stuck in the waterway since March 12. The closure prevents ships from reaching Exxon Mobil Corp.’s 349,000 bpd refinery in Beaumont, Texas. Fourteen ships waited Wednesday morning to enter or exit the closed portion of the waterway.

  26. El Diablo said

    AS EXPECTED, THE TIDE TURNS (but you better keep up about it here, these ‘positive’ stories won’t be on CNBC)

    March 14, 2007 (Bloomberg News, 12:17) Production Returns to Full Capacity at Imperial Oil’s 118,000 b/d Nanticoke Refinery in Ontario

    According to a press release issued Thursday (March 15) repairs to the Imperial Nanticoke refinery have been completed and the refinery is returning to full capacity as planned. The supply situation in Ontario continues to improve as the system
    rebalances. Esso retail service stations continue to be restocked and diesel supply to industrial and commercial customers is improving. According to Bloomberg News, all units were up and the refinery was operating at as much as 80 percent of capacity late Wednesday night. Production at the refinery had been curtailed since February 15,
    when a fire damaged an oil-processing unit. The curtailment caused fuel shortages in parts of Ontario.
    http://www.newswire.ca/en/releases/archive/March2007/15/c1331.html

    March 15, 2007 (Reuters, 07:52) Regenerator Restarts at Valero’s 83,000 b/d Houston Refinery

    According to a filing with Texas regulators, Valero began restarting a regenerator at its Houston refinery Wednesday (March 14) night. It is unclear from the filing whether the unit restart is related to two sulfur recover unit (SRU) shutdowns that
    have occurred at the refinery since late February.

    March 15, 2007 (Bloomberg News, 04:02) Shell Has Access to Ruptured Oil Pipeline in Nigeria

    According to Nigeria’s oil minister, Royal Dutch Shell has gained access to ruptured crude oil pipeline that has cut production in the country by 187,000 b/d. Access to the spill area had been blocked by community groups since March 4, when the spill occurred. The oil minister said he couldn’t say how long repairs will take.

    March 15, 2007 (Reuters, 04:23) Nigerian Oil Minister Sees Most Shut Oil Production Back by End of Year

    Militant attacks have disrupted about a fifth of Nigeria’s oil production.

  27. […] Snafu […]

  28. Oil Industry spokesperson said last week said they warned the government that the shortage might happen over a year ago but No names or further information was supplied as to what that warning included. Also with the Petro Canada refinery closing down in Oakville, Halton Region, No indications as to what is being done from a Risk Management perspective to replace the facility to prevent further shortages here in Ontario. Also We Understand that a Shell Refinery here may have closed here on Lake Ontario without a contingency plan to replace the storage of gasoline in case a problem happens like what we’re living right at this time

  29. […] the week award has to go to Zman who, on Monday morning said: "As the refining industry snafus sort themselves out and OPEC prepares to meet in Vienna oil is starting to retreat. I’m […]

  30. El Diablo said

    Comment: Up and Down on refineries, etc. but the big point is that the market CONTINUES TO IGNORE INVENTORIES. Inventories are at sufficient levels to navigate even ‘major’ supply disruptions, certainly these ‘minor, temporary’ ones. In fact, the reason for inventories in the first place is to smooth supply through temporary adversity. When the market acts as if inventories do not exist, it is acting as if a top does not exist. This is fundamentally flawed and highlights an excellent opportunity to short.

    March 16, 2007 (Reuters, 10:26) Fire Shuts Hydrocracking Unit at BP’s 260,000 b/d Los Angeles Area Refinery in California
    A brief fire, extinguished after ten minutes, shut the Hydrocracking unit at the BP refinery in Carson, California on March 15. According to a company representative, there was no impact on production and all other units were operating normally. There was no indication as to the extent of the damage or the duration of the outage.

    March 16, 2007 (Reuters, 07:57) Shell Begins Repairs on Damaged Pipeline in Nigeria
    Shell announced that that repairs had commenced on the damaged pipeline on March 16. The line that has been shut since March 4, carries 187,000 b/d of crude oil to the Bonny Light terminal in Nigeria. Shell had been prevented from getting to the site by protesters. Shell has reached an agreement with the local community and work is now proceeding.

    March 16, 2007 (Reuters, 11:30) Fire Destroys Railroad Bridge in Sacramento, California; Trains Including Ethanol Shipments Diverted
    An intense fire broke out on a wooden trestle on the Union Pacific line near Sacramento, California on March 15. The fire destroyed most of the bridge and because of the nature of the trestle is expected to continue smoldering for several days. According to the local CBS television station, some 50 trains are being rerouted. Among the principal products carried on the line are lumber, grain and ethanol.
    http://www.reuters.com/article/bondsNews/idUSN1646582720070316

  31. Thanks for sharing explanations and writing this post. Looking forward to more of your stuff. Hopefully you often update your Blog often since you have found a loyal visitor .

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