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By Jessica Resnick-Ault
NEW YORK, Jan 13 (Reuters) - An unusual spate of refineryglitches at the weekend from Philadelphia to Illinois was morelikely caused by extreme cold conditions than the breakneck paceat which the plants have been running, according to engineersand consultants.
The disruptions, which included three fires on Saturday andone shut-down late last week, affected about one-fifth of therefining capacity in the eastern half of the United States. Therefineries are in restart, with most of the capacity expectedback on-line by the end of the week.
"Cold just kind of seeps its way in, and freezes somethingup and all the sudden it stops working," said Neil Earnest, aconsultant at Muse Stancil, whose practice includes assetperformance. Refineries that run heavier crude oil, such asCanadian crude, may be more susceptible to problems withfreezes, all else being equal, Earnest said.
Cold weather usually pays havoc with the water and steamsystems, said an engineer who spoke on condition of anonymitybecause of company policy. If crude is not kept hot,particularly heavy grades, it will get stuck in pipes, heexplained.
Even so, the remarkably coincidental timing of the glitchesand fires will raise questions about the stability of refinersthat have been running at exceptionally high rates to capitalizeon the strongest profit margins in years.
In July, for instance, refiners ran at 94.6 percent of theircapacity, the highest such rate in a decade, according to datafrom the U.S. Energy Information Administration. Last week theywere running at 93.9 percent, the second-highest rate for thefirst week of January of the past 15 years.
While refineries are complex, high-pressure facilities thatoften suffer incidental glitches with minimal impact, the rashof incidents over the past few days was unprecedented in recentyears outside of storm-related disruptions such as SuperstormSandy in 2012 or Gulf Coast hurricanes.
BP's 413,500 bpd Whiting, Indiana, refinery had problemsthat were attributed to cold weather, as freezing temperaturesdelayed restart of a crude unit and the plant's largest crudeunit cut back production. Philadelphia Energy Solutions had autility failure that resulted in small fires at its 330,000 bpdPhiladelphia refinery.
Marathon also reported a fire at its 212,000 bpd Robinson,Illinois refinery, shutting a crude and vacuum unit. HuskyEnergy reported a fire in the isocracker at its 144,000 bpdLima, Ohio, refinery, which damaged the unit badly and forcedall others to halt output.
Before the weekend, the National Weather Service warned ofan Arctic air blast from Canada providing subzero temperaturesfor the U.S. Midwest, Southeast, Mid-Atlantic and Northeast.
Refiners, particularly those with access to discounteddomestic crude, saw robust profit margins on the back of theshale boom, and raised their output.
But these higher-than-normal utilization rates are unlikelyto have triggered the outages, said Earnest.
"In many instances, it's better to run the refinery at highutilization rates, because it prevents fouling on the exchangesand furnaces," said Andy Lipow, of Lipow Oil Associates inHouston.
Utility systems, like the one that failed at thePhiladelphia Energy Solutions refinery in Philadelphia, shouldhold up despite higher run rates, said Mark Rout of KBC AdvancedTechnologies.
"Those utility systems should be more of a service to a plant and unaffected by run rates," Rout said.
KBC's view is that best-in-class utilization isapproximately 96 percent, accounting for occasional maintenanceturnarounds.
Beyond the run rates and weather, refineries are subject toother factors, like procedural changes when equipment isstarting or going out of service, said Michael Wojciechowski, aHouston-based refining analyst at WoodMac. (Reporting By Jessica Resnick-Ault; Editing by Grant McCool)
