Lower Mississippi River refineries, chemical plants prepare for possible flood disruptions
By Ben DuBose
Refineries and nearby chemical plants along the lower Mississippi River are bracing for possible flooding in coming weeks as rising waters move downstream, raising fears over disruptions to US gasoline supply.
In Louisiana, Shell officials said they were preparing for possible logistics disruptions when the river crests, expected to occur around May 23 or 24 for that region.
"This could affect our ability to load barges and ships at some of the docks at our Geismar, Louisiana, and Norco, Louisiana, facilities," Shell spokeswoman Jill Davis said.
"We are coordinating efforts to limit the effects this may have on supplying our customers and will be moving as many products by rail and truck as our logistics assets and the railroad’s schedules allow," she added. "Plant personnel are implementing designated weather response plans so that we are prepared and ready to act as needed."
Shell said it would continue to monitor the situation as well as predictions from the US Army Corps of Engineers. It noted that for competitive reasons, it does not plan to provide details on the operational status of individual units or information on supply.
Shell has its 235,000 bpd Convent refinery in Louisiana as well as its 234,700 bpd Norco refinery, in addition to nearby chemical plants.
Officials with ExxonMobil and Valero each said they were monitoring the situation and making logistics preparations, but did not expect refinery operations to be disrupted, according to multiple news reports.
ExxonMobil's refinery in Baton Rouge is the second-largest in the US with 504,500 bpd of capacity. Meanwhile, Valero operates its 185,003 bpd Norco refinery in St. Charles.
Overall, news agency CNBC estimates that the Baton Rouge-New Orleans area in Louisiana is home to 11 refineries, with a combined capacity of about 900,000 bpd.
That would represent about 10% of overall US gasoline supply.
In addition, the Colonial Pipeline has a major pump station located near Baton Rouge. The Colonial is the largest US pipeline, carrying gasoline from Texas to New York.
On the exclusively petrochemical side, Dow Chemical and Georgia Gulf each operate significant complexes in Plaquemine, Louisiana.
Those companies did not immediately respond to requests for comment.
After WTI crude oil prices dipped below $100/bbl in the midst of a historic weekly drop to open May, prices surged back above $100/bbl on Monday as fears rose regarding supply disruptions.
Moreover, gasoline futures shot up by more than 6%.
Crude and gasoline futures were up again on Tuesday morning, though the percentage gains were less than Monday as flooding concerns eased slightly.
Valero said its 180,000 bpd refinery in Memphis, Tennessee - around where the Mississippi River is currently cresting - was still operating, according to spokesman Bill Day.
The US was also working to take pressure off the river, opening up the Bonnet Carre Spillway and considering opening the Morganza Spillway for the first time since 1973.
US officials are expecting record crests for much of the remainder of May, with more rain forecast to fall later this week in the region.
Following the crests, it could take up to two weeks for the river to fall below flood stage, reports said.
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