Power Loss May Have Damaged Coker at ExxonMobil's Illinois Refinery : Sources -- OPIS
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Sources familiar with operations at ExxonMobil's 248,000 b/d refinery in Joliet, Ill., on Wednesday said a coker may have been damaged when the plant lost power following severe storms on July 15.
The company has not commented on the extent of the damage.
The coker is critical to operations at the refinery because it is one of the largest users of heavy Canadian crude. Prices for Western Canadian Select have been in retreat since the incident, with the discount to West Texas Intermediate widening from about $11.50/bbl in early July to $15.25-$15.50/bbl recently. With the NYMEX WTI contract trading at about $77.38/bbl Wednesday morning, the WCS in Hardisty, Alberta, is valued at about $62/bbl.
The complex narrowly escaped even more serious consequences. Press reports said that tornadic activity came within a tenth of a mile of the facility.
ExxonMobil has said it hopes to restart multiple units at the facility before the end of July, but refinery experts say that won't be possible if the coker, which is used to remove sulfur and other impurities from heavy sour Canadian crude, was damaged.
The plant is a single train facility, which means it only has one active crude oil distillation unit. The complex houses 16 processing and conversion units, including four hydrotreaters and several sulfur recovery units.
A similar power loss in the middle of winter knocked out BP's 440,000 b/d Whiting, Ind., refinery for much of the first quarter. Complex refineries require complex restart protocols, according to those familiar with refinery maintenance.
The downtime for Joliet has raised gasoline prices in Chicago well above those in other U.S. cash markets. Spot RBOB in that market briefly traded at 65cts over NYMEX RBOB futures this week and is holding at about 63cts over the screen. Spot CBOB values were at about 12-13cts above RBOB futures.
With Chicago gas prices anywhere from 20-60cts/gal above New York Harbor numbers, it may change the dynamic for western Pennsylvania or even Ohio markets. For most of this summer, and most of the last year, product sourced to Great Lakes refiners had a distinct advantage to barrels coming from Northeastern refineries.
The Chicago surge has also affected U.S. gasoline prices. If not for the regional increases, the national average price would be well under $3.50/gal. Illinois retail prices have risen by 18cts/gal over the last week, with prices in Cook County surpassing $4.40/gal. Weekly increases of 15-18cts/gal have also been recorded for Indiana, Michigan and Wisconsin and prices in Ohio are up by about 8cts/gal.
The Joliet refinery, which was built in 1972, is a relative youngster by U.S. refining standards. The only newer greenfield refinery is Marathon Petroleum's Garyville, La., facility.
Energy Information Administration numbers released at midmorning showed a tighter Midwest gasoline supply in the week ended Friday. The agency estimated gasoline stocks in the region fell by 2 million bbl last week to 46.2 million bbl, down from 47.6 million bbl a year ago.
This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.
--Reporting by Tom Kloza, [email protected]; Editing by Michael Kelly, [email protected]
(END) Dow Jones Newswires
07-24-24 1213ET