In Katrina’s Wake, Painful Recovery


As New Orleans began its long road to recovery from Hurricane Katrina, there were still no timetables yesterday for the return of an important lubricant additive plant and a terminal for imported Group III base oils.

Officials at Chevron Oronite said reopening of the companys Belle Chasse, La., additive plant depends on infrastructure such as roads that must be reopened and electrical power that must be restored – and that they did not know when those things would happen. ConocoPhillips said it had no new information to offer about the status of its base oil terminal at nearby Braithwaite.

Meanwhile, there was more bad news from Dow Chemical Co., which issued force majeure declarations for products made at its plant in Hahnville, La. The announcements serve as notice that the company will be unable to meet orders for several types of chemicals, including two used in the lubes industry – ethyleneamines and polyethylene glycols.

Good news came from ExxonMobil, which said yesterday that it has resumed normal operations at its Baton Rouge, La., refinery, which includes a 16,000-barrel-per-day base oil plant. The refinery operated at reduced levels for several days prior to then because of disruptions in the supply of crude oil.

Barge traffic on the Mississippi River resumed over the weekend, and industry observers said it appeared likely to return to normal levels soon.

For the moment, at least, the Katrinas biggest blow for the lubricants industry may be the sidelining of Oronites plant, located on New Orleans southeast edge, downriver on the Mississippi. Oronite is one of the worlds four largest lube additive suppliers, and Belle Chasse is its largest plant in North America.

Officials said the facility itself appears to have survived the storm largely intact.

We have found moderate wind damage, but it could have been much, much worse, Vice President of Manufacturing and Supply Bill Schumacher said. We are still inspecting equipment, but at this point it appears that we do not have any major issues in terms of damage to the plant.

Like other businesses in the area, the plant looks likely to face bigger hurdles outside its grounds. Truck traffic into and out of the plant is halted until roads can be cleared and repaired. Union Pacific must repair several washouts on rail lines to the plant, and the company has informed Oronite that service will not resume until it has inspected wheels and brakes on every car caught in the hurricane. In addition, natural gas supply to the plant has been knocked out.

In the midst of New Orleans devastation, it was difficult to say when such steps to recovery will take place. Just yesterday the city began pumping out water that flooded 80 percent of its area. Estimates of time needed to complete that task ranged from three weeks to three months.

The Stolthaven terminal at Braithwaite is the primary location at which ConocoPhillips receives and dispenses Group III oils imported from South Koreas S-Oil Corp. ConocoPhillips said yesterday that it had no information updating the status of that terminal – which is owned by Stolt – despite its expectation a week earlier that it would. ConocoPhillips also receives S-Oil base oils at terminals on the East and West coasts and said previously that it would use those facilities to supply customers normally served out of Braithwaite. Braithwaite is on the Mississippi River just east of New Orleans.

Dow declared force majeure Aug. 31 for ethyleneamines produced by subsidiary Union Carbide Corp. at its St. Charles plant in Hahnville, several miles west, or upriver, from New Orleans. Among other applications, ethyleneamines are used as chemical intermediates in the manufacture of lube additives.

Two days later, Dow issued a similar statement covering several other lines of products, including heavy molecular weight polyethylene glycols and methoxypolyethylene glycols marketed under the Carbowax brand name. Those products are used as surface lubricants and surfactants in a wide range of lubricants, as well as in other applications.

Dow also cited infrastructure disruptions in stating that it could not yet say how long its force majeure declarations will last.

While we expect to resume operations within the next several weeks, due to the nature and severity of the aftermath caused, we cannot determine the impact or duration of this situation at this point in time, said Keith Wiggins, global commercial director for polyglycols and surfactants.

ExxonMobil reported progress in surmounting logistical problems that hampered its Baton Rouge refinery, located approximately 80 miles northwest of New Orleans. Although Katrina appeared to have spared the refinery from serious damage, crude supply was disrupted for several days. The company said yesterday that it had solved those problems and that the refinery was operating at normal levels.

Ergon said its naphthenic base oil plant at Vicksburg, Miss., was operating normally. In fact, officials said the plant slowed operations for just a few hours due to computer problems encountered during the hurricane. The companys terminal in St. James, La., was also operating.

Calumet Lubricants said the hurricane did not affect operations at either of its base oil plants located inland at Shreveport and Princeton, La.

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