Colonial Pipeline restarts gasoline; refineries still down maybe for weeks

Colonial Pipeline restarts floods

Colonial Pipeline has restarted operations at its main gasoline and distillate lines after it shut most of its network in precaution for Hurricane Ida, which landed on Sunday on Louisiana, and Mississippi wreaking havoc on its way.

The company reported this Tuesday that its lines went back online on Monday, before midnight.

On the other hand, floods and power outages are still the norms as of Tuesday; which is making it more difficult for refiners and oil operators to assess the damages upon the assets. As we reported previously, all New Orleans and almost all of Louisiana lost electrical power on Monday.

According to analysts quoted by Reuters, the damages and the floods are so severe that it may take two to three weeks to restart producing oil in the offshore platforms and fully resume output at Louisiana refineries. As for power, it may also take weeks to restore it; transmission lines in the coastal areas were swamped.

Rod West, head of utility operations at Entergy Corp, said. “This restoration is not going to be a likely quick turnaround. This was a significant catastrophic wind event, whereas Katrina was a water event by comparison.”

Also recommended for you: Kiewit to build first offshore wind substation of New York. Click here to read.

Colonial Pipeline restarted, but refineries and oil production still down

On the other hand, Phillips 66 has not yet been able to fully assess the damages at its 255,600-barrel-per-day refinery on the Mississippi River in Belle Chasse, Louisiana. This refinery is the one called Alliance, which was put on sale last week, as we reported previously. A spokesperson for the company said. “That is the most water I have ever seen in my 31 years come through to Alliance.”

Moreover, nine other refineries have stalled or reduced production, including ExxonMobil’s 520,000-bpd Baton Rouge; which has taken offline around 2.3 million bpd of capacity or 13% of the country’s total.

In addition, as of Monday, 95% of the oil production at the Gulf Coast, and 94% of the gas output remained offline, the Bureau of Safety and Environmental Enforcement said. A total of 288 production platforms and 11 rigs remained evacuated.

Finally, such uncertainty about the restart in production pushed oil prices on Monday, and is also spiking gasoline prices.

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