Louisiana Refiners to Take Days to Resume Full Supply

(Bloomberg) — Louisiana refineries that shut down before Hurricane Gustav may take up to 10 days to resume operations because of a lack of power, stunting fuel output at a time when regional gasoline inventories are at a 10-month low.

Marathon Oil Corp., Valero Energy Corp. and other refiners that shut plants as Gustav swept through the Gulf of Mexico began assessing the extent of damage today. Exxon Mobil Corp. shut its Baton Rouge plant, the second-largest U.S. refinery, after winds snapped power lines.


Gasoline futures prices, which have fallen 3.8 percent since the end of last week, may rebound as power failures delay recovery across Louisiana, the second-largest oil-refining state, said Andy Lipow, president of Lipow Oil Associates LLC. Valero and Royal Dutch Shell Plc are among companies that shut 17 percent of U.S. crude-processing capacity as Gustav neared Louisiana, which ships 75 percent of its fuel to other states.

“We’re going to lose a fair amount of gasoline and diesel production,” Lipow said in a telephone interview from Houston. “Once the refiner gets all its people back into the plant, for a simple refinery it can take three to five days to get back up and running, while a complex refinery can take anywhere from 5 to 10 days to go full tilt.”

Bloomberg