03 May 2010 20:10 [Source: ICIS news]
By Lane Kelley and Ryan Hickman
HOUSTON (ICIS news)--An ever-growing oil slick in the US Gulf could soon create supply issues for refiners and chemical producers in the area, although ports on the Louisiana, Mississippi and Alabama coasts said on Monday that they were still open to ship traffic.
The 20 April explosion on Transocean's Deepwater Horizon offshore rig and the subsequent flow of oil from BP's well it was drilling produced a waterborne oil patch has been drifting towards the coastline of the three states with ports and petroleum production sites.
Crude oil tankers manoeuvring the oil-saturated waters could be delayed or eventually denied access if entry points for the ships feeding refineries and chemical plants were closed, said Andy Lipow of Lipow Oil Associates, a consulting firm in Houston.
A tanker could be held up by a day or two if its hulls were draped in crude oil and needed to be pressure washed before entering a port, Lipow explained. Taking a diverted route around the oil-filled water would also cause delays.
In Mississippi, Chevron's Pascagoula refinery relies heavily on imported tanker oil to produce 330,000 bbl/day of refined products. In addition, Chevron Phillips Chemical makes benzene and paraxylene (PX) at an integrated chemical plant.
"The worse case is the oil slick is so bad it prevents traffic from getting to Pascagoula," Lipow said.
Calls to Chevron and Chevron Phillips seeking comment were not returned.
The state port at Gulfport in Mississippi said commercial ship traffic has not yet been affected there. Gulfport was being used as a supply loading area for oil spill responders, according to an Associated Press report quoting Gulfport Director Don Allee.
Shell has an 86,000 bbl/day refinery in Saraland, Alabama, and a chemical facility in Mobile, Alabama, that sit on the coastline.
Shell said there had been no impact on production but continued to monitor the spill's impact in the Gulf.
"We have contingency plans in place but can't discuss them for proprietary reasons," said company spokesman Ted Rolfvondenbaumen.
All commercial traffic continued to transit the port of Mobile, Jimmy Lyons, director and chief executive for the port, said in a statement.
"We are confident that we will not see a change in port operations over the next 24 hours," he said.
All entering vessels at Mobile were advised to use the most easterly of the two approaches to the port, and vessel agents must certify to the harbourmaster in writing that the vessel had not gone through the oil slick area, according to the statement.
Possibly the worst-case shipping scenario for the region was if the largest US crude oil import facility, the Louisiana Offshore Oil Port (LOOP), shut down because of the spill, Lipow said.
"The LOOP has a capacity of 1m bbl/day of crude imports," Lipow said. "If operations were to shut down at the LOOP, we would be talking about a serious impact."
The US government's strategic petroleum reserve (SPR) could supply crude oil to refiners in the area if the LOOP halted imports, which has happened in the past, Lipow explained.
Currently, the LOOP had not been affected because of its location west of the spill area, and it did not expect to be affected, said Barb Hestermann, business development manager at the LOOP.
"We don't anticipate any effect" from the oil spill, Hestermann said. "It's business as usual now and all operations are normal."
At the port of New Orleans, a key feedstock entryway trading route for a slew of chemical buyers and sellers, spokesman Chris Bonura said ship traffic remained unrestricted on the lower Mississippi river and its main approach from the Gulf.
The oil spill was affecting part of the eastern section of the Mississippi river, but Southwest Pass, the main pass for deep draft navigation, remained clear of oil. Ships headed to New Orleans did not have to sail through the spill since their routes were further out, Bonura said.
"We should be in good shape at least until Wednesday," Bonura said.
However, with no end in sight to the estimated 5,000 bbl/day of oil coming from BP's deepwater well, the fate of the US Gulf's coastlines would ultimately depend on weather patterns.
"At this stage no one knows how long it is going to last," Lipow said. "Everything is going to depend on how long the spill is going to continue and currents and the wind."
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