BP Delays Texas City Refinery Start After Power Plant Trip

BP Plc (BP/) has delayed the restart of its 475,000-barrel-a-day Texas City, Texas, refinery after an external power failure forced its chemical plant to shut down, said a person with knowledge of the situation.

The chemical plant shut early today after a power failure from a third-party provider, said the person, who declined to be identified because the information is confidential. BP is waiting to restart its 475,000-barrel-a-day refinery until it is comfortable with the grid’s reliability, said the person.

Calpine Corp.’s 453-megawatt power plant in Texas City automatically tripped offline early today due to “voltage fluctuations on the electric transmission grid operated by a third party,” Norma Dunn, a spokeswoman for the plant, said in an e-mail.

Three refineries with almost 5 percent of U.S. fuel-making capacity were knocked offline or had units shut after power failures in Texas City late April 25 and early yesterday, sending gasoline futures to a 33-month high in New York.

Gasoline for May delivery rose 6.22 cents, or 1.9 percent, to settle at $3.4194 a gallon at 2:30 p.m. on the New York Mercantile Exchange. Futures touched $3.425, the highest intraday price for the front-month contract since July 15, 2008. Prices surged as much as 2 percent as gasoline stockpiles dropped a 10th consecutive week, losing 2.51 million barrels to 205.6 million, the Energy Department said.

‘Curtail Operations’

Valero Energy Corp. (VLO) is “proceeding cautiously” and has “no specific timetable” for returning its 245,000-barrel-a-day plant in Texas City to full rates, Bill Day, a company spokesman, said in a telephone interview. “A reliable supply of electricity is necessary before our refinery, or any refinery, can fully restart,” he said.

Marathon Oil Corp. (MRO)’s 81,500-barrel-a-day Texas City refinery, which had some units forced offline due to the electrical disruptions, is operating normally, Shane Pochard, a Findlay, Ohio-based spokesman, said in an e-mail.

Texas New Mexico Power Co. had at least two events today affecting its transmission system in the Texas City area, said Cathy Garber, a spokeswoman for the company, which is owned by PNM Resources Inc. There were outages to equipment of both TNMP and industrial customers, she said.

“The events caused a voltage sag that affects all industrial customers on our system in the Texas City area,” Garber said. “Our understanding is that these momentary power disturbances led some industrial customers on our system to curtail operations.”

The faults on Texas New Mexico equipment the past two days were probably caused by a residue buildup on insulators and humidity that have accumulated more than normal due to a lack of rain, according to Garber.

To contact the reporter on this story: Aaron Clark in New York at aclark27@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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