An Ergon official said this week that the company is ahead of schedule to repair damage caused by an April 30 fire at its Vicksburg, Miss., base oil refinery and that it has sufficient inventories to supply contract customers during the halt in production.
Because we batch run, we keep a months worth of inventory, said Mike Burnett, vice president of Ergons Petroleum Specialties Marketing Division. Were already a full week ahead of schedule to resume operations so were confident that well be able to supply our ratable customers ourselves.
The fire started with a cracked heater tube in a flue-gas stack but the company is still trying to determine the cause, Burnett said. The damage sidelined the hydrotreater at the largest U.S. source of naphthenic base oils, which has capacity of 8,300 barrels per day. Initially, management expected production to halt for five or six weeks but that estimate has now been reduced to four or five weeks.
Burnett said Ergon has cut off spot sales for the duration of the shut down. He acknowledged that the company contacted one competitor as a contingency, in case it needs help meeting orders. He added, however, that he does not expect to purchase base oils from any other refiner.