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© Reuters. FILE PHOTO: A sheen seems on the flooded property of the Phillips 66 Alliance Refinery, following the passing of Hurricane Ida in an NOAA surveillance {photograph} taken south of Belle Chasse, Louisiana, U.S. August 31, 2021. NOAA/Handout through REUTERS
By Erwin Seba
HOUSTON (Reuters) – Houston-based oil producer Hilcorp is evaluating Phillips 66 (NYSE:)’s refinery in Alliance, Louisiana, for conversion into an oil export terminal, stated 4 sources aware of the matter, a transfer that will get rid of it as a supply of motor fuels.
Hilcorp, the biggest privately owned U.S. oil producer, with operations from Alaska to Pennsylvania to Texas, didn’t reply to questions on its curiosity within the facility, which occupies 2,400 acres alongside the Mississippi River.
Phillips 66 declined to touch upon Hilcorp’s curiosity.
The hurricane-damaged refinery stays on the market and its “advertising and marketing course of is ongoing,” stated Phillips 66 spokesperson Bernardo Fallas. The corporate plans to restore the storm damages and restart the power, he stated.
In August, Phillips 66 started assembly with potential patrons of the 255,600 barrel-per-day (bpd) refinery in Louisiana, on the state’s southeast coast. It was knocked out of fee by Hurricane Ida final month when a protecting wall gave method, flooding the plant.
“The U.S. refining enterprise sooner or later goes to be smaller, not greater,” Phillips 66 Chief Govt Officer Greg Garland stated final month as he laid out plans to advance companies in renewable diesel, hydrogen and supplies for electric-car batteries.
A lot of the a number of toes of water that flooded the plant has been eliminated and most workers have returned to clean-up of the plant, stated folks aware of its operations.
In June, the U.S. Vitality Info Administration stated nationwide refining capability final 12 months fell by 4.5%, or 848,385 bpd, due to weak refining income with work-from-home insurance policies slashing gasoline demand.
A conversion of the Alliance web site right into a storage and distribution terminal is smart, stated Andrew Lipow, president of Houston consultants Lipow Oil Associates.
“These refineries are getting older and older particularly in a local weather the place we have now seen gasoline demand has peaked,” Lipow stated.
The Alliance refinery is certainly one of three alongside the Gulf Coast that has been provided on the market this 12 months.
The opposite two are LyondellBasell Industries’ 263,776-bpd Houston refinery and Royal Dutch Shell’s shuttered 211,146-bpd Convent, Louisiana, refinery.
The Alliance refinery may nonetheless have a future within the present vitality transition, stated John Auers, government vp with refinery-consultants Turner, Mason & Firm
“It’s nonetheless a viable refinery,” Auers stated. “We’ve had a variety of capability turned off. It may doubtlessly come again fairly sturdy.”
Phillips 66 does have an incentive to make repairs, Auers stated.
“You at all times get extra money (for a refinery) if it’s in an operable situation,” Auers stated.
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