- The Washington Times - Saturday, September 24, 2005

BATON ROUGE, La. (AP) — Hurricane Rita damaged some oil-refining facilities in Texas and Louisiana, although energy companies said the blow was not overwhelming and industry analysts said the impact on fuel supplies and gasoline prices should be less than feared.

Pump prices for gasoline and diesel fuel could rise if pipelines and oil refineries are slow to resume operations, and analysts said they were paying close attention to facilities in Lake Charles, La., and Beaumont and Port Arthur in Texas.

“There will be some modest disruption of supplies of gasoline and other products,” said William Veno, an analyst at Cambridge Energy Research Associates. “But I don’t think it’s going to be as severe a situation as Hurricane Katrina.”

Tom Kloza of Oil Price Information Service in Wall, N.J., predicted some short-term price rise, but characterized Rita as “more than a nuisance, but short of a catastrophe.”

Power outages were reported across wide swaths of Texas and Louisiana, leaving more than a million customers without electricity, and one utility spokeswoman said it could be weeks before service is fully restored.

Valero Energy Corp. said it will take two weeks to a month to repair and restart its 255,000-barrel-per-day Port Arthur refinery, which sustained “significant damage to two cooling towers and a flare stack.”

Motiva Enterprises Inc. and Citgo Petroleum Corp. reported minor damage to plants in Port Arthur and Lake Charles, respectively.

But on a positive note, Exxon Mobil Corp. said it completed a safety assessment and plans to restart its Baytown refinery outside Houston, a 557,000-barrel-per-day plant that is the nation’s largest.

Valero said the lights were on at its refineries in Houston and Texas City, Texas — plants that refine almost 300,000 barrels of oil per day. And BP PLC spokesman Scott Dean said that was encouraging since “they’re right next door to us there.” BP’s Texas City refinery processes 437,000 barrels per day.

Marathon Petroleum Co. said its Texas City refinery, which processes 72,000 barrels of crude oil per day, has power and sustained only minimal damage.

Based on computer modeling and initial reports, the Energy Department said it was cautiously optimistic about the nine refineries in the Houston area.

“But we really need to look at the Port Arthur region and other areas directly impacted,” spokesman Craig Stevens said. “It may still be two or three days before we get a sense of the actual picture.”

Before Rita hit, 16 refineries in Texas accounting for 2.3 million barrels per day of capacity shut down and evacuated their crews. Four refineries in Louisiana and Mississippi whose output had been more than 800,000 barrels per day remain closed almost a month after Hurricane Katrina, and a significant amount of oil and natural gas output has not returned.

Crude oil prices fell Friday as traders welcomed news that Rita had weakened.

Traders got their first chance to react to the Rita news when trading resumed on the International Petroleum Exchange in London late last night. The New York Mercantile Exchange was to open electronic trading for crude oil futures and other energy futures at 10 a.m. today, rather than the usual 7 p.m.

Analysts said they were eager to find out about the impact on refinery operations near the Texas-Louisiana state line.

“Lake Charles looks like it’s the closest in terms of any kind of real impact. That’s where we’ve got to focus our attention,” said John Felmy, chief economist of the American Petroleum Institute in Washington.

“Remember, the power outages are what bedeviled recovery efforts after Katrina,” said oil analyst John Kilduff of Fimat USA in New York.

The Louisiana Offshore Oil Port, through which 10 percent of all U.S. oil imports flow, stopped offloading tankers earlier last week, but by midday yesterday the LOOP had resumed delivering oil from storage to customers.

Scheduling manager Mark Bugg said rough seas will prevent the resumption of oil tanker deliveries until today or tomorrow.

The U.S. Minerals Management Service said yesterday that 634 platforms in the Gulf remained unstaffed, unchanged from Friday.

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