UPDATE 2-Frigid temperatures snarl some U.S. refinery operations

Tue Jan 7, 2014 5:35pm EST

* Wholesale gasoline prices jump in US Midwest

* Marathon, Valero, Exxon, PBF confront cold

* Many problems seen short-lived

HOUSTON, Jan 7 (Reuters) - Frigid weather rattled several U.S. refiners on Tuesday, temporarily affecting production from Canada to Tennessee, and boosting wholesale gasoline prices in the Midwest more than 7 cents a gallon.

Marathon Petroleum Corp. said its 120,000-barrel-per-day (bpd) Detroit refinery lost instrument air due to freezing temperatures, while Valero Energy Corp. reported its 180,000 bpd Memphis refinery had a "system shutdown believed to be due to low temperatures in the area," according to a filing with state and federal regulators.

Those notices came one day after an equipment shutdown due to cold weather at Exxon Mobil Corp's 238,000 bpd Joliet, Illinois refinery. Exxon said the refinery was back to normal operations on Tuesday. The company did not describe the malfunction but said it resulted in releases through its flare stacks.

Gasoline for Midwest markets outside of Chicago climbed 7.5 cents a gallon on Tuesday to a discount of 15 cents a gallon to the February RBOB gasoline contract on the New York Mercantile Exchange, traders said.

Gasoline for delivery to the Chicago market rose 5.35 cents to an offer price of 12 cents a gallon under February RBOB, traders said.

Citgo Petroleum Corp said its 174,500 bpd Lemont, Illinois refinery was "running at planned rates" while "working its way through minor issues caused by low ambient temperatures."

Cold weather can pose significant challenges to refiners. Some refinery units operate at nearly 1,000 degrees Fahrenheit (540 degrees Celcius). Oil and other feedstocks running through plant pipelines are heated to 300 or 400 degrees. Sudden deep drops in temperature can cause liquids to freeze - leading to breakdowns or piping ruptures.

And there can be problems like that cited by Marathon at its Detroit plant. Instrument air links to sensors used to monitor the status of equipment at refineries. Without instrumentation, most refinery units go to flaring to prevent a problem until the sensors can be fixed.

Energy industry intelligence company Genscape reported on Tuesday that a gasoline-making fluid catalytic cracking unit was shut down late Monday at Marathon's Detroit refinery.

The outages at Marathon and Exxon appeared to be short-lived. Marathon said it was beginning the process of restarting the affected units.

Other refineries were not so lucky.

In Canada, North Atlantic Refining Ltd's Come by Chance refinery in Newfoundland was still offline following power cuts in the region that started on Thursday, before a blizzard hit the area and two days before a fire at a power substation, local media reported.

Flaring, emissions and power trouble were reported at several other U.S. refineries on Tuesday, though weather was not immediately cited as a contributing factor.

Flaring reportedly occurred at Marathon's 212,000 bpd Catlettsburg Refinery in Kentucky and PBF Energy Inc's 182,200 bpd refinery in Delaware City, Delaware.

Traders said PBF's 160,000 bpd refinery in Paulsboro, New Jersey, was shut by a power outage.

Just as cold weather was spreading across the United States, Monroe Energy LLC, a unit of Delta Air Lines Inc, started planned maintenance on a crude unit and isocracker at its 185,000 barrel per day (bpd) refinery in Trainer, Pennsylvania.

IIR, an energy market intelligence provider, reported that some units at the plant were shut on Friday and would be shut for 30 days, though a company spokesman on Monday could not specify when the work started.

Genscape reported brief, elevated flaring on Friday at the refinery.

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