* Northeastern refiners watch, consider unit shutdowns
* Pipelines begin to put storm plans into effect
* Coast Guard issues storm conditions for Mid-Atlantic
By Janet McGurty
NEW YORK, Oct 28 Oil refineries along the U.S.
Atlantic Seaboard, having put their storm preparedness plans in
place, were waiting on Sunday to see if they would have to shut
units or cut rates at their plants ahead of Hurricane Sandy's
expected landfall in the Northeast early this week.
Six East Coast oil refineries representing 1.19 million
barrels per day - or 7 percent of total U.S. capacity - could
potentially be hit by the deadly storm, which left at least 41
dead as it roared through the Caribbean and churned northward.
The storm threat boosted gasoline and heating oil futures as
well as cash product prices in the New York Harbor over the past
Hurricane Sandy could be the biggest storm to hit the United
States mainland when it is expected to come ashore on Monday
night, bringing strong winds and dangerous flooding to the East
Coast from the mid-Atlantic states to New England, forecasters
said on Sunday.
Sandy could have a brutal impact on major cities in the
target zone - including Boston, New York, Washington, Baltimore,
and Philadelphia - one of the most densely populated regions of
Some forecasters say Sandy has the potential to be a
multibillion-dollar disaster, causing greater damage than last
summer's Hurricane Irene, but it was too soon to tell its actual
trajectory and refiners were taking early steps to prepare.
"We are taking this seriously, monitoring the storm's
progress and weather forecasts, with comprehensive preparedness
plans in place," said Michael Karlovich, a spokesman for PBF
PBF Energy owns and operates two East Coast refineries, the
190,000 barrels-per-day Delaware City plant and the 180,000 bpd
Paulsboro plant in southern New Jersey, across the Delaware
River from the Philadelphia area.
Sources familiar with Delaware City refinery operations said
that discussions continue as to whether to shut down units or
cut rates way back ahead of the storm.
Phillips 66, owner of the 238,000 bpd Bayway
refinery in Linden, New Jersey, said it is monitoring the storm.
"All of our East Coast operations continue to operate
normally while we prepare our facilities for the storm," said
Rich Johnson, a spokesman for the company.
A source familiar with Bayway operations said as of Saturday
night, there were no units shut yet.
IRENE VS SANDY
Hurricane Irene, which hit the region in August 2011, caused
severe flooding and power outages all along the East Coast, and
some refinery disruptions. Phillips 66 closed its Bayway
refinery while other refiners cut back rates, but the oil
industry escaped Irene with little, if any, damage.
Hess Corp said on Friday it had implemented its
storm plan for its 70,000 bpd refinery in Port Reading, New
Jersey, and that it would continue to watch Sandy's progress.
In addition, two other plants are potentially within the
storm's path: Philadelphia Energy Solutions' 330,000 bpd
Philadelphia refinery and Delta's Monroe Energy 185,000 bpd
plant in Trainer, Pennsylvania.
The Trainer refinery continues to operate normally and
expects to continue to, as it expects to escape the brunt of the
"At this time, we have not and do not anticipate changing
operation at this juncture," said a source familiar with
refinery operations. "We are on the leeward side of the storm's
At the Philadelphia refinery, now jointly owned and operated
by Sunoco and Carlyle Group, close monitoring of the storm
"Philadelphia Energy Solutions Refining Complex continues
monitoring the storm closely," spokeswoman Cherice Corley said,
adding they are following their hurricane preparedness plan.
A source familiar with refinery operations said the
refinery, the largest in the region, has not cut rates.
Oil markets are watching for any potential disruptions to
gasoline and heating oil supplies, as lean fuel stockpiles in
the region make the East Coast vulnerable to price spikes,
especially ahead of the winter heating season.
The Colonial Pipeline, which carries about 15 percent of the
country's gasoline and diesel from Gulf Coast refineries up the
New York Harbor, is preparing for the storm, according to
spokesman Steve Baker.
The pipeline activated its hurricane preparedness plan at 3
p.m. EDT (1900 GMT) Friday and has already started making sure
emergency generators are in place, as well as sa ndbagging
cri tical areas which may be prone to flooding.
Buckeye Pipeline, which owns and operates about 6,000 miles
of oil product pipelines mostly north and west of Philadelphia,
has prepared a Hurricane Contingency Plan.
"Buckeye will continue to operate their pipelines as
scheduled until the time that it is no longer safe to do so, or
power or product availability make it no longer possible to run
a particular line section," the company said in a statement.
"Buckeye has secured some generator capability that is being
staged strategically to provide temporary power to certain pump
stations," it said.
Vessels in and out of some southern and mid-Atlantic ports
are operating under Coast Guard storm conditions.
In Hampton Roads, near the Plains All American's 6.6
million barrels crude and oil products storage facility in
Yorktown, Virginia, coastal waters are closed and under code
Zulu, the highest warning level. The warning extends from
Virginia to the Maryland/Delaware border, with expectations of
gale force winds within 12 hours.
The New York harbor is currently under Code Yankee, which
expects gale force winds within 24 hours.