NEW YORK — The second-largest refinery on the East
Coast was shutting down on Sunday and three other plants cut output as
Hurricane Sandy threatened widespread power outages and a massive storm surge
across the region, according to a report from Reuters.
has begun shutting its 238,000-barrels-per day (bpd) Bayway, N.J.
refinery, nicknamed the "gasoline machine" because of its key role
supplying motor fuel to the New York City area. The plant is the only one to
close during Hurricane Irene last year.
biggest refinery, Philadelphia Energy Solutions'' 330,000-bpd facility in
Philadelphia, has begun to reduce rates, according to a source familiar with
the plant. The refinery had shut an acid unit but it was unclear by how much
rates had been cut at the other units.
reduced output at its Delaware plant and Hess Corp curbed runs in New Jersey,
sources said, as Sandy affected operations at refineries that account for
two-thirds of the East Coast''s 1.2-million-bpd capacity.
refineries are built to withstand hurricane-force winds, they are vulnerable to
power outages, which can damage units in the case of a "cold
shutdown", as well as flood damage if the storm surge accompanying Sandy -
forecast to be as high as 11 feet - breaches their defenses.
were already factoring in a potential squeeze on fuel supplies. Benchmark
gasoline futures jumped 1 percent and heating oil rose 0.6 percent as New York
Mercantile Exchange (NYMEX) trading began on Sunday evening, U.S. time. Crude
oil prices dipped by 0.4 percent.
Irene, which hit the region in August 2011, caused severe flooding and power
outages along the East Coast as well as some refinery disruptions. Phillips 66
closed the Bayway refinery while other refiners cut rates, but the oil industry
escaped Irene with relatively little, if any, damage.
industrial facilities were also affected. Dow Chemical Co said it would
temporary close three plants in New Jersey ahead of Hurricane Sandy, as well as
its East Coast headquarters in Philadelphia and a research facility nearby.