Now a Hurricane, Isaac Bears Down on Gulf Coast Industrial Facilities

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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Offshore Oil and Gas production in the Gulf of Mexico came to a virtual standstill Tuesday as Tropical Storm Isaac officially became Hurricane Isaac, with top sustained winds of 75 miles per hour. The hurricane was expected to hit land early Tuesday evening. Isaac, measuring more than 350 miles across, has lumbered through the Gulf at about 10 miles per hour. Late Tuesday it was located less than 75 miles southeast of New Orleans. Officials were preparing for storm surges of up to 12 feet and as much as 20 inches of rain in some areas.

Isaac had temporarily shut down over 75% of offshore oil production in the Gulf, according to news reports on Tuesday. Natural gas production from the Gulf's offshore wells was down by over 50%. Ports and airports in Louisiana, Mississippi and Alabama were shut down Tuesday.

Two of the area's five ethylene plants were closed, and the remaining three reduced staffing to levels necessary to keeping the units running at minimal rates, according to Trey Hamblet, Industrial Info's vice president of research for the Chemical Processing Industry.

A number of crude oil and natural gas pipelines in the area are temporarily closed, added Jesus Davis, Industrial Info's vice president of research for the Oil & Gas Production, Transmission and Terminals industries. Some of the pipelines that Industrial Info confirmed were closed include:

• Shell's 300,000 BBL/d Houston-Hourma crude oil pipeline
• Capline's 1.2 million barrel per day crude oil pipeline
• Kinder Morgan's Southern Natural Gas System, a 400 million cubic foot per day gas pipeline

Davis noted the operations of several offshore pipelines also have been affected by Isaac, including:

• Destin's 1.2 billion cubic feet per day offshore pipeline connected to BP's Pascagoula Natural Gas Processing Plant
• Enbridge's Stingray pipeline, which can carry up to 560 million cubic foot per day
• The Discovery Gas Transmission pipeline, which has capacity of 600 million cubic foot per day

The storm has affected 1.74 million barrels per day (BBL/d) of oil refining capacity in the New Orleans, Mississippi and Alabama area. This number includes refineries that are progressing towards full shutdown or a reduction in operations as well as plants that have already shut down. That area has 12 refineries with 2.7 million BBL/d of refining capacity, so more than 64% of refining capacity was affected. Overall, PADD 3 has 9.097 million BBL/d of refining capacity, so Hurricane Isaac affected about 19% of PADD 3 refining capacity.

Click the icon at right to view a map of the refineries in the New Orleans, Mississippi and Alabama areas.

The situation remains fluid. Some refineries and chemical processors have opted to remain open while others have closed and still others are operating at a reduced rate.

One of the largest refineries in the area, ExxonMobil's 504,000 BBL/d plant in Baton Rouge, remained open Tuesday evening, but was operating at a reduced rate. Non-essential personnel had been sent home. Another large refinery, Marathon's Garyville, a 450,000 BBL/d plant, also was operating at a reduced rate Tuesday. Motiva's Convent refinery, which has capacity of 230,000 BBL/d, made the decision to temporarily close Tuesday. The Placid Port Allen refinery, which has a capacity of 55,000 BBL/d, also decided to close on Tuesday. For more information on Isaac-related closure plans, see August 28, 2012, article --Gulf Coast Refiners and Chemical Processors Shut Down as Tropical Storm Isaac Veers Westward.

In an unconfirmed report, Valero's refinery in Memphis, Tennessee, was said to be running low on crude oil due to the temporary closure of the Capline pipeline. Industrial Info Resources (IIR) Energy has not confirmed those reports.

"As of late Tuesday, Isaac was a Category 1 hurricane, with sustained wind speeds of about 80 miles per hour and gusts of up to 100 miles per hour," noted IIR Energy's Dave Elpers. "Most hurricane experts expect it to remain a Category 1 hurricane. By contrast, Hurricane Katrina, which hit the Gulf seven years ago as a Category 3 hurricane packing sustained wind speeds of about 125 miles per hour."

"But because Isaac has moved slowly through the Gulf, it is expected to drop up to 20 inches of rain along the Gulf. That level of rain, plus a storm surge estimated as up to 12 feet in some areas, is a double-whammy for communities and industrial facilities located along the Gulf Coast," Elpers said. Storm surges and heavy rains could pose major challenges to restarting those refineries and chemical processing plants that have temporarily closed." Most plant operators made their closure decisions over the previous weekend or this past Monday, he noted.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.