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Oil Factbox: Industry Braces for Hurricanes Irma, Katia

New York (Platts)--8 Sep 2017 522 pm EDT/2122 GMT

The North American oil industry was bracing Friday for the arrival of two more hurricanes this weekend: Irma, which was nearing southern Florida, and Katia, which was heading to the Gulf Coast of Mexico.

Katia, the weaker of the two storms, was expected to make landfall Friday night, while Irma was expected to make landfall Sunday morning, according to the National Hurricane Center.

Both Mexico and Florida are dependent on waterborne fuel shipments to satisfy local gasoline demand, and the storms could disrupt loadings. But gasoline shortages so far have only been seen in Florida as residents have been evacuating ahead of the Category 4 hurricane.

"We're doing everything possible to expedite delivery of fuel, but the demand is almost unprecedented, as you still have residents in other areas of the state -- Tampa, Jacksonville, the panhandle -- fueling up as well in addition to South Florida," said James Miller, spokesman for the Florida Petroleum Marketers and Convenience Store Association.

Miller said fuel cargoes continue to arrive at ports, which remain open.

Ports in the US Coast Guard's Miami sector will close at 8 pm Friday (0000 GMT Saturday).

Mexico's Port of Tuxpan, which receives 42% of the country's total gasoline imports, was closed ahead of Katia, now a Category 2 hurricane.

Onexpo, Mexico's largest fuel retail station association, told Platts on Friday that despite the Tuxpan closure, no fuel shortages have been reported across the country.

Trade Flow

* Florida's evacuation ahead of Hurricane Irma is creating widespread fuel shortages Friday, particularly in the southern end of the state. Residents in the northern parts of the states are now joining those from the Florida Keys and the Miami, Fort Lauderdale and Palm Beach areas who hit the roads earlier in the week. Governor Rick Scott said Friday that 8.4 million gallons of additional fuel had been shipped into Port Everglades and more than 5 million gallons into the Port of Tampa as of 6 pm Thursday. He said Port Everglades would closed Friday night and no additional fuel would be shipped to South Florida until after Hurricane Irma had passed. Scott ordered police escorts for fuel trucks across the state Thursday and urged gasoline stations to remain open as long as possible.

* Mexico is looking west for cargoes to replace its hurricane-hit US Gulf Coast supplies, but sources say shipping time and Asia product tightness have not brought the armada that might have been expected. Platts trade flow software cFlow showed at least four Asian product cargoes en route to Mexico: Lindanger from South Korea, STI Bronx from Japan, Maritime Polaris from Malaysia and STI St Charles from Singapore, all MR-sized vessels capable of carrying 300,000 barrels or more. The first was scheduled to arrive September 13, the second on September 18 and the other two around end-month, but the ships could divert elsewhere.

Government Response

* US President Donald Trump has waived Jones Act requirements to address a potential fuel shortage in Florida caused by the approaching Hurricane Irma. Elaine Duke, the acting secretary of the Department of Homeland Security, signed a waiver which will allow gasoline and other refined products to move between US ports on foreign-flagged vessels over the next seven days. The waiver is needed to "facilitate" shipments of refined petroleum products, including gasoline, diesel and jet fuel, from ports in New York, Pennsylvania, Texas and Louisiana to South Carolina, Georgia, Florida, and Puerto Rico. The Jones Act is a law that requires vessels transporting goods between US ports to be US-flagged, US-built and majority US-owned.

* Florida Governor Rick Scott has ordered police escorts for fuel trucks across the state Thursday and urged gasoline stations to remain open as long as possible. "We have asked fuel companies to identify ships that are in route to our ports so we can arrange military escorts to get them here faster," Scott said in a statement.

Ports and Terminals

* Pemex data shows the ports of Tuxpan, Dos Bocas and the platform of Cayo Arcas are closed. Also, operations for smaller vessels at the ports of Veracruz, Madero, and Pajaritos has been suspended. The Port of Tuxpan receives 42% of Mexico's total imports of gasoline and 28% of Mexico's diesel imports, according to the country's Energy Secretariat. Pajaritos receives 23% of the country's gasoline imports and 36% of its diesel imports. Veracruz receives 6% of Mexico's total diesel imports.

* The Georgia Ports Authority will cease operations ahead of Hurricane Irma at the ports of Savannah and Brunswick Saturday through Tuesday. Truck gates are closing at 6 pm EDT (2200 GMT) Friday in Savannah. This follows an announcement Thursday from Vane Brothers, the largest bunker fuel barge operator on the US Atlantic Coast, that it plans to suspend all barge operations from 6 pm EDT Friday in the ports of Jacksonville, Florida; Savannah; and Charleston, South Carolina.

* South Florida ports are expected to shut to both inbound and outbound traffic Friday at 8 pm EDT when the US Coast Guard issues Port Condition Zulu.

* A number of storage tanks and other equipment at NuStar Energy's crude and refined products storage terminal on the Caribbean island of St. Eustatius were damaged by Hurricane Irma. There were no spills associated with the damaged equipment or tanks, and the company had already shut down the 14 million-barrel terminal Monday. St. Eustatius is home to 56 storage tanks for crude, distillates, gasoline, jet fuel, blending components, residual fuels and condensate. The terminal also has six mooring locations that are capable of handling vessels of up to 520,000 DWT, which means the terminal can serve VLCC and ULCCs typically with a capacity of over 2 million barrels.

* Buckeye Partners shut down its Yabucoa, Puerto Rico, facility Tuesday ahead of Irma. That terminal has around 4.6 million barrels of storage capacity for crude, fuel oil and refined products, according to Buckeye's website. Buckeye also said it was "implementing hurricane preparedness plans" at its Grand Bahamas, Bahamas and Florida terminal facilities. Buckeye's 26.2 million barrel terminal in Freeport, Grand Bahama Island, stores crude, fuel oil, and refined products. Statoil said its South Riding Point terminal, also on Grand Bahama Island, was open Thursday, and that the company is monitoring the storm and will "take necessary precautions."

* Florida depends on barge shipments rather than pipelines for 97% of its refined products. Also, about 10% of all US Atlantic Coast gasoline blending is done in Florida, which will be impeded to some degree by port closures. This will likely to disrupt further domestic gasoline supply already in disarray after Hurricane Harvey raked Texas Gulf Coast refineries two weeks ago. Ten petroleum terminals are located in and around Fort Lauderdale, owned by refiners like ExxonMobil and Chevron, and midstream companies like Kinder Morgan and TransMontaigne well as privately held companies like George E. Warren. Tankers "deliver about 12.5 million gallons of petroleum products to Port Everglades" every day, according to the port website, more than 50% of which is gasoline.


* Roughly 1.03 million b/d of refining capacity remains down, while another 2.7 million b/d of capacity is in the process of returning. Assuming the returning refineries are operating at 50% of capacity, the total downed capacity comes to roughly 2.38 million b/d, or 12.8% of US capacity.

Full shutdown:

(Company: Location -- Capacity (b/d))

  • ExxonMobil: Beaumont, TX -- 362,300
  • Buckeye: Corpus Christi, TX -- 50,000
  • Magellan: Corpus Christi, TX -- 50,000
  • Shell: Deer Park, TX -- 340,000
  • Total: Port Arthur, TX -- 225,500

Total capacity closed: 1,027,800
Share of US capacity:6%

Partial shutdown/returning:

(Company: Location -- Capacity (b/d); 50% of Capacity (b/d))

  • ExxonMobil***: Baytown, TX -- 560,500; 280,250
  • Flint Hills***: Corpus Christi, TX-West -- 230,000; 115,000
  • Flint Hills***: Corpus Christi, TX-East -- 70,000; 35,000
  • Motiva***: Port Arthur, TX -- 603,000; 301,500
  • Valero***: Three Rivers, TX -- 89,000; 44,500
  • Lyondell***: Houston, TX -- 263,776; 131,888
  • Marathon***: Galveston Bay, TX -- 459,000; 229,500
  • Marathon: Texas City, TX -- 86,000; 43,000
  • Valero***: Houston, TX -- 191,000; 95,500
  • Valero***: Port Arthur, TX -- 335,000; 167,500
  • Petrobras***: Pasadena, TX -- 112,229; 56,115
  • Phillips 66***: Sweeny, TX -- 247,000; 123,500

Total capacity reduced: 1,350,753

Closed + reduced capacity: 2,378,553

Share of US capacity: 12.8%



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Oil Factbox: USGC Refinery Outages, Port Closures Continue to Increase Aug 30 - 30 Aug 2017

Oil Factbox: Refineries Now Facing Brunt of Harvey-Related Flooding - 27 Aug 2017