Gulf Base Oil Plants Weather Laura

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The United States base oil market is still waiting for information about the reopening of the Excel Paralubes plant in Westlake, Louisiana, after Hurricane Laura treated the industry with a relatively light touch last week.

The API Group II base oil plant was among several facilities that shut down or reduced operations as precautions ahead of Laura, which barreled ashore Aug. 25 near the Louisiana-Texas border. Others have begun returning to normal operations or reportedly are within days of doing so.

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Laura was a Category 4 hurricane with winds of 160 miles per hour when it made landfall, the strongest storm to strike Louisiana since 1856. It contributed to at least 17 deaths according to CNN, and caused widespread power outages, but it caused less of a storm surge than forecasters had warned and moved through the area relatively fast, thereby limiting the amount of flooding.

Excel Paralubes, a 50-50 joint venture between Phillips 66 and Flint Hills Resources, is located just outside Lake Charles, among the areas hit hardest by the storm. Phillips 66, the marketing agent, issued a statement Tuesday saying employees could not yet safely access the plant but that early assessments of its condition were positive. It noted, though, that the facility – which has capacity to make 22,000 barrels of base oil per day – will face several obstacles as it tries to resume operations, including extensive damage to the power grid that serves the plant; an embargo on rail traffic in the area, one of the modes by which base oils are transported from the plant; and conditions making some area roads impassable.

Phillips 66 did not suggest a timeline for reopening the plant, and outside observers offered mixed appraisals. Some expected the unit to begin a gradual restart in the next few days. “They are just waiting to assess and then start up the plant when power returns,” one industry source said.

Others speculated that the plant could remain off-line for weeks, due to the damage to the electricity grid. Local officials have estimated that it could take up to two months for power to be restored to certain areas. There Phillips 66 statement advised customers to expect shipment delays until further notice.

Motiva’s Group II plant in nearby Port Arthur, Texas, was not damaged, according to reports. Motiva has its own power plant, but was heard to be waiting to be assisted by the local power company to get it restarted. “Operators were called back in on Friday to do a full assessment,” a source familiar with the plant’s operations commented, noting that the producer was likely to systematically begin the restart process this week and be able to ship out product by the weekend if everything went as planned. There was no official statement available from the producer.

ExxonMobil said Friday that its fuels and chemicals refining complex in Beaumont, Texas, which includes a polyalphaolefin unit and a finished lubricant blending plant, sustained only minor damage and that it had begun to restart operations.

Calumet Specialty Products Partners LP said Monday that its 11,900 b/d paraffinic and naphthenic base oil plant in Shreveport, Louisiana, was back up and running after being throttled down ahead of the storm.

Ergon’s Vicksburg, Mississippi refinery operations – which has a 25,000 b/d naphthenic and paraffinic base oil plant – were not impacted by Hurricane Laura, nor were operations in its lubes terminals on the Gulf Coast, Justin Goldman, Ergon senior vice president for supply and distribution, told Lube Report in an emailed statement. “The shutdown of the intracoastal waterway in the Lake Charles area is causing some minor delays on barges in transit, but no major issues are expected, and we are communicating with customers regarding status,” Goldman said.

Several companies noted that many of their employees were grappling with damage to their homes and communities.