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Autumn refinery outages 2014

Hydrocarbon Engineering,

The US Energy Information Administration (EIA) has issued its semiannual report on refinery outages and their potential implications for the availability of gasoline and distillate supply. The report considers the supply of distillate fuel and gasoline supply at the Petroleum Administration for Defense District (PADD) and sub-PADD levels rather than at a national level. National balances have limited meaning for the adequacy of distillate fuel and gasoline supply because pipeline infrastructure, geography and marine shipping regulations constrain the amount of product that can flow among the different regions of the US. The report also contains a discussion of current market conditions and average historical unplanned outages.

As with previous reports, this one analyses the adequacy of available refinery capacity to produce middle distillate (diesel fuel, jet fuel, and heating oil) and gasoline, focusing on the two refinery units, the crude distillation unit (CDU) and the fluid catalytic cracking unit (FCCU), that are most strongly correlated with distillate and gasoline production, respectively.

Across the different regions of the country, fall 2014 refinery maintenance was concentrated in September and October, and many refineries have returned to or are in the process of returning to normal operations. Less maintenance is planned for November and there is no maintenance planned for December.

In Most regions, planned maintenance was light compared to last year as well as historical levels. However, in the Midwest, 9% of FCCU capacity was offline for maintenance in September and 20% was offline in October. This resulted in below average gasoline stocks in September and October, which proved problematic in parts of the Midwest when unexpected outages in the Upper Midwest and the Eastern Great Lakes region further reduced gasoline supply. While Midwest refineries supply most of the distillate fuel and gasoline that is consumed in the region, the Midwest also received products from the Gulf Coast, including supplemental supply during disruptions, as was the case in October.

FCCU maintenance in the Rocky Mountain region (PADD 4) was also significant during October. PADD 4 refineries produce much of the distillate and gasoline that is consumed in the region, but the region is also supplied with product from PADD 2 as well as Canada. During periods of tight supply, additional product can be made available to PADD 4 from these other regions. 7% of the region’s CDU capacity was also offline in October. However, PADD 4 distillate stocks have been above the five year average level and supply should be adequate.

In the Gulf Coast region (PADD 3), which is the largest refining centre in the US and home to just over half of US capacity, planned fall 2014 CDU maintenance was concentrated in October, when 5% of regional CDU capacity was offline. FCCU planned maintenance was concentrated in September when 10% of regional capacity was offline. Supply of distillate and gasoline remained adequate during this period, although the change in the seasonal gasoline vapour pressure specification did cause some transient market imbalances, as is often the case.

With substantially more refining capacity than is needed to meet in region gasoline and distillate demand, PADD 3 refineries are important sources of supply for other US regions, notably PADD 1 , PADD 2 and to a less extent PADD 5. The region also supplies international markets. Exports of gasoline from PADD 3, which have averaged 443 000 bpd for the first eight months of 2014, can in some instances be diverted to domestic use, providing an important source of additional supply to meet both in-region and neighbouring region supply shortfalls.

PADD 5 had very little planned CDU maintenance and no planned FCCU maintenance.

Adapted from a press release by Emma McAleavey.

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