UpdateAmericas refiners mostly unharmed as tsunami crosses Pacific

11 March 2011 22:46  [Source: ICIS news]

NOAA projected tsunami wave map, darker shades most significant(adds details throughout, sulphuric acid impact in paragraphs 16-19)

HOUSTON (ICIS)--Refiners along the Pacific coast in North and South America are continuing to monitor the impact from high waves caused by the earthquake and tsunami in Japan, but only minimal production disruptions were reported as of late Friday.

In Peru, market sources said a caustic soda plant in Callao would shut down for seven or eight hours starting at 16:00 local time (21:00 GMT) as a precautionary measure. The plant is expected to restart immediately thereafter.

In other South American countries, such as Chile, Colombia and Ecuador, evacuations were ordered for coastal regions. However, industrial facilities were expected to remain running, according to sources.

In the US, Tesoro said it is 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 said that refining operations had not been affected.

“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 employees were evacuated 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 activated emergency operations centres as precautionary measures and were continuing to watch the situation.

Similarly, ConocoPhillips officials said they were monitoring 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.

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).

Hundreds were killed and many 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.

The tsunami could affect the country's sulphuric acid market, sources said, as Japan is among the top three exporters in the world.


Japanese exports of sulphuric acid totalled 2.8m tonnes in 2010, with shipments going to Chile, China, the Philippines and India. Total sulphuric acid capacity is about 7.5m tonnes.


Japan produces sulphuric acid as a by-product of copper smelting, with the largest producers being Mitsubishi Materials, Pan Pacific and Sumitomo.


Any damage and loss of output would be critical to the market because global supplies are tight. Market sources have said it is too early to tell if there was any damage to smelters in the region.

As tsunami-related waves rolled across the Pacific, 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 15:30 hours Houston time (21:30 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 seen along the northern California and Oregon coastlines, likely the peak of the impact for the continental US and North America, forecasters said.

Damage thus far was limited to boats and docks, 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 Mexico, the port in Salina Cruz along the Pacific coast was shut and evacuated as waves crashed into the area. However, the Petroleos Mexicanos (Pemex) refinery there was still operating, the company said.

Also in Mexico, Sempra LNG said its 1.0bn cubic feet (bcf)/day import terminal in Ensenada was open and operating normally.

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

Additional reporting by Ronald Coifman, Fiona Boyd, Sheena Martin, Ryan Hickman, Lane Kelley, and George Martin in Houston and James Young in Mexico City

By: Ben DuBose
+1 713 525 2653

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