US Pacific refiners monitor operations as tsunami waves roll in

11 March 2011 18:20  [Source: ICIS news]

HOUSTON (ICIS)--US refiners along the Pacific coast were monitoring the impact on Friday from high waves caused by the earthquake and tsunami in Japan, but no disruptions to production were initially reported.

Tesoro said it was carefully watching activities at its Pacific Rim subsidiary operations, which include the 95,000 bbl/day Kapolei refinery in Oahu, Hawaii, and the 80,000 bbl/day Kenai refinery in Alaska.

However, reports were that refining operations had not been affected, the company said.

“As needed, we will adjust our operations to ensure the safety of employees, the community and our facilities,” Tesoro spokesman George Marcy said.

A few of Tesoro’s retail service stations in low-lying areas of Hawaii had closed and evacuated employees as a precaution, he noted.

Likewise, Valero said it was also monitoring the situation carefully, but production at its 147,000 bbl/day Benicia and 135,000 bbl/day Wilmington refineries in California had not been altered, spokesman Bill Day said.

Shell spokesman Ted Rolfvondenbaumen said its west coast manufacturing sites had activated emergency operations centres as precautionary measures and were continuing to watch the situation.

Similarly, ConocoPhillips officials said they were monitoring the tsunami and making preparations where appropriate, spokesman Rich Johnson said.

ConocoPhillips operates a 139,000 bbl/day refinery in Carson, California and a 75,000 bbl/day refinery in Rodeo, California.

Meanwhile, Alon USA’s 70,000 bbl/day Paramount refinery in California was not expected to be impacted by the storm as the refinery is well inland, Alon USA spokeswoman Christi Chesner said.

On the US Gulf and New York Harbor (NYH) markets, spot prices for gasoline were seen weaker for all grades, sources said.

On the east coast, market sources said that differentials had slipped by 0.5 cent/gal.

These came alongside lower crude prices, which plummeted on worries that the earthquake and tsunami could weaken Japanese oil demand.

The 8.9 magnitude quake struck Japan’s northeast coast at 14:46 local time (5:46 GMT) on Friday, some 373 km (232 miles) northeast of Toyko, and 130km east of Sendai, Honshu – the largest island in the country, according to the US Geological Survey (USGS).

More than 200 people were killed and hundreds more remain missing. The tsunami included waves up to 10 metres (32.8 feet) high, which swept inland destroying buildings and infrastructure and paralysing Japan's refining and petrochemical operations.

As waves roll across the Pacific, tsunami warnings were put in place throughout the region, including the coastlines of North America and South America.

In the Hawaiian islands, where tsunami-related waves rolled in during the early-morning hours, authorities warned of maximum wave heights of up to 6 feet.

However, as of 11:00 hours Houston time (17:00 GMT), widespread damage had not been seen, according to news reports.

Ports in Hawaii were reported closed in anticipation, though a chemical shipping broker in Houston said his accounts had not been affected.

A US methanol market source downplayed the tsunami’s operational impact, noting that “what matters most is intact for us”.

Waves of 2-5 feet were projected for the northern California and Oregon coastlines, likely the peak of the impact for the continental US and North America, forecasters said.

Widespread damage was not expected, but authorities were advising residents to avoid beaches and low-lying areas.

One liquefied petroleum gas (LPG) tanker was prevented from entering the San Francisco port in California as a safety precaution, news reports said.

Also in California, oil tankers in Los Angeles were asked to stop pumping at the ports, according to reports.

In South America, Chile’s Easter Island was being evacuated ahead of the expected late-afternoon arrival of waves.

However, Chilean industry sources did not expect major disruptions from the tsunami.

In Mexico, Sempra LNG operates a 1.0bn cubic feet (bcf)/day import terminal in Ensenada, Mexico, along the Baja coast, which serves the California electricity market.

The company said it had put its tsunami plan in place, but did not anticipate a substantial impact from the projected 1-to-2 metre waves.

“Our LNG [liquefied natural gas] terminal is open and operating normally,” said Kathlenn Teora, a spokeswoman for Sempra.

Waves from the tsunami are expected to hit all of the affected Americas areas by the evening at the latest.

Additional reporting by Sheena Martin, Ryan Hickman, Lane Kelley and George Martin

By: Ben DuBose
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