October 26, 2012 / 10:53 PM / 7 years ago

Northeast U.S. oil refineries prepare for Hurricane Sandy

NEW YORK (Reuters) - Oil refineries along the U.S. Atlantic Seaboard on Friday braced for Hurricane Sandy, putting in place emergency plans ahead of the storm’s expected landfall in the Northeast early next week.

Six East Coast oil refineries representing 1.19 million barrels per day - or 7 percent of total U.S. capacity - could potentially be hit by the deadly storm, which left at least 41 dead as it roared through the Caribbean and churned northward.

The storm threat boosted gasoline and heating oil futures as well as cash product prices in the New York Harbor over the past two sessions.

Forecasters say Sandy is expected to be pulled in by another storm system moving from the west, making it come ashore in the northeast late Monday or early Tuesday and unleashing heavy rains, storm surges and possibly near hurricane-force winds.

Some forecasters say Sandy has the potential to be a multibillion-dollar disaster, wreaking greater damage than last year’s Hurricane Irene, but it was too soon to tell its actual trajectory and refiners were taking early steps to prepare.

“Both our East Coast refineries have comprehensive hurricane preparedness procedures in place that they will implement based on the storm track, as they did last year for Hurricane Irene,” said Michael Karlovich, a spokesman for PBF Energy.

PBF Energy owns and operates two East Coast refineries, the 190,000 barrels per day Delaware City plant and the 180,000 bpd Paulsboro plant in Southern New Jersey, across the Delaware River from the Philadelphia area.

Phillips 66, owner of the 238,000 bpd Bayway refinery in Linden, New Jersey, said it is monitoring the storm.

“All of our East Coast operations continue to operate normally while we prepare our facilities for the storm,” said Rich Johnson, a spokesman for the company.

Hurricane Irene, which hit the region in August 2011, caused severe flooding and power outages all along the East Coast, and some refinery disruptions. Phillips 66 closed its Bayway refinery while other refiners cut back rates, but the oil industry escaped Irene with little, if any, damage.

Hess Corp said on Friday it had implemented its storm plan for its 70,000 bpd refinery in Port Reading, New Jersey and that it would continue to watch Sandy’s progress.

In addition, two other plants are potentially within the storm’s path: Philadelphia Energy Solutions’ 330,000 bpd Philadelphia refinery and Delta’s Monroe Energy 185,000 bpd plant in Trainer, Pennsylvania.

Oil markets are watching for any potential disruptions to gasoline and heating oil supplies, as lean fuel stockpiles in the region make the East Coast vulnerable to price spikes, especially ahead of the winter heating season.

The Colonial Pipeline, which carries about 15 percent of the country’s gasoline and diesel from Gulf Coast refineries up the New York Harbor, is preparing for the storm, according to spokesman Steve Baker.

The pipeline intended to activate its hurricane preparedness plan at 3 p.m. EDT (1900 GMT) Friday and has already started making sure emergency generators are in place, as well as sandbagging critical areas which may be prone to flooding.

Buckeye Pipeline, which owns and operates about 6,000 miles of oil product pipelines mostly north and west of Philadelphia, has prepared a Hurricane Contingency Plan.

“Buckeye will continue to operate their pipelines as scheduled until the time that it is no longer safe to do so, or power or product availability make it no longer possible to run a particular line section,” the company said in a statement.

“Buckeye has secured some generator capability that is being staged strategically to provide temporary power to certain pump stations,” it said.

Vessels in and out of some southern and mid-Atlantic ports are being restricted advised to batten down. In Hampton Roads, near the Plains All American’s 6.6 million barrels crude and oil products storage facility in Yorktown, Virginia, all ports remain open but the Coast Guard has upgraded the port condition to X-Ray, the second least serious of all conditions.

This means that the Hampton Roads and the Virginia Capes expect gale force winds within 48 hours.

Further up the coast, Delaware Bay has set Port Condition Whiskey for the Delaware River, the Delaware Bay, the coasts of Pennsylvania, New Jersey and Delaware. This means that gale force winds are expected to reach the area within 72 hours.

Editing by Bernadette Baum, James Dalgleish, G Crosse

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