UPDATE 3-US floods hit fuel transport, threaten refineries

Mon May 9, 2011 5:46pm EDT

Related Topics

 * Flood waters headed to crest in Memphis
 * Flooding expected in Louisiana within two weeks
 NEW YORK/HOUSTON, May 9 (Reuters) - Heavy flooding in the
U.S. Midwest will disrupt crude supplies to one U.S. refiner in
days and could threaten a swathe of Louisiana plants within
weeks as the rising waters move south down the Mississippi.
 The U.S. Army Corps of Engineers plans to open a spillway
that will send Mississippi flood waters down the Atchafalaya
River in Louisiana. This will make the Atchafalaya unnavigable
to barges and cut off 25 percent to 30 percent of crude
supplies to Alon USA Energy's (ALJ.N) 80,000 barrel per day
(bpd) Krotz Springs, Louisiana refinery, a source said.
[ID:nN09248481] [ID:nN09233555]
 U.S. gasoline futures jumped 6 percent on Monday, in part
due to the threat to fuel supplies after weeks of heavy rains
and swelling rivers. [ID:nL3E7G90DS]
 In Memphis, flood waters were moving to a crest, expected
on Tuesday, at or above 48 feet (14.6 meters).
 Valero Energy Corp's (VLO.N) 180,000 barrel per day
Memphis, Tennessee refinery remained in operation on Monday
morning as the nearby Mississippi River was approaching record
flood levels and forcing area residents from their homes.
 In addition to the Memphis refinery, nine Louisiana
refineries were at risk from the flooding, although it was not
expected to reach those plants for two weeks. The 10 plants
have a combined refining capacity of 2.4 million barrels per
day (bpd), equal to 13.7 percent of national capacity.
 U.S. officials were preparing to open the Morganza spillway
to divert waters down the Atchafalaya, forcing it to close in
two days, the source said. Already some barge operators have
already declined to navigate it.
 The Krotz Spring plant has been testing out new crudes,
including Bakken, Eagle Ford and West Texas Intermediate --
some of which come through on barge -- as local Louisiana
grades become more expensive, the source added.
 For a complete list of oil infrastructure under threat from
floods, click [ID:N09239373]
 WORSENING FLOODS
 Scores of U.S. heartland rivers from the Dakotas to Ohio
have flooded following a snowy winter and heavy spring rains,
feeding the near-record crests on the Mississippi River.
 On the Ohio River, the U.S. Coast Guard said 20 percent of
barge terminals it regulates were unable to operate because of
high water levels and flooding, curbing transfer of petroleum
products to trucks. [ID:nWEN2940]
 El Paso Corp EP.N was monitoring possible flooding from
the bulging Mississippi River around its Southern Natural Gas
pipeline. [ID:nN09254294]
 Further down river in Louisiana, officials opened portions
of the Bonnet Carre spillway near the refining hub of Norco,
Louisiana, to send Mississippi River water to Lake
Pontchartrain.
 The Colonial Pipeline, which transports refined products
from refineries in Texas, Louisiana, Mississippi and Alabama to
terminals across the U.S. South and East Coast, is ready for
high water coming into Louisiana, and does not expect
operations to be affected, spokesman Steve Baker said.
 While the system's pipelines are underground -- and under
the swollen riverbed -- there is a spot in Louisiana where a
double levee on the west bank provides extra protection, Baker
said. Colonial officials plan to do regular flyovers and
monitor water movement closely.
 (Reporting by Erwin Seba, Kristen Hays, Janet McGurty, Selam
Gebrekidan, Jeanine Prezioso; Writing by Erwin Seba and Matthew
Robinson; Editing by David Gregorio)






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