Valero, Marathon, BP Start Texas Refineries After Power Loss

BP Plc (BP/) said its Texas City, Texas, refinery returned to normal operations after a power loss today. Valero Energy Corp. (VLO) and Marathon Oil Corp. (MRO) are restarting their refineries in the Gulf Coast City.

The three refineries, with combined crude oil processing capacity of more than 800,000 barrels a day, represent almost 5 percent of U.S. refining capacity. The power outage was the second since April 25 and comes the day before the beginning of the three-day U.S. Memorial Day holiday, the traditional kickoff of the summer driving season.

“Our operations are normal now and there was minimal impact,” Scott Dean, a BP spokesman in Chicago, said in an interview.

“Power has been restored to all production units,” Bill Day, a Valero spokesman based in San Antonio, said in an e-mail. “We expect the plant to be back at planned rates quickly.”

Robert Calmus, a Marathon spokesman, declined to comment on the progress of the restart at that plant. A wet gas compressor at the refinery shut down around 9:30 a.m. local time yesterday, leading to a partial plant shutdown, according to a filing with state regulators. Marathon had restarted the plant shortly before today’s power outage at 1:47 a.m.

Lack of Rain

The blackout appears to be the latest failure related to lack of rain that clears lines of heat-trapping deposits, said Terry Hadley, a spokesman for the Public Utility Commission of Texas.

The heat-trapping deposits may include dust, chemicals emitted by refineries and other industry, and corrosion caused by salt air, he said. The most recent blackout is still under investigation, he said.

The outage affected 13,500 residential customers and three industrial facilities, Cathy Garber, a spokeswoman for Lewisville, Texas-based Texas-New Mexico Power Co., said in a telephone interview.

The power company found a broken insulator on the transmission line and is trying to determine what broke it, said Garber, who is based in Albuquerque, New Mexico. Texas-New Mexico Power is owned by PNM Resources Inc. of Albuquerque. The power outages in April were caused by residue buildup on the equipment due to the drought, Garber said.

Centerpoint Energy Inc., the Houston area’s largest electric distributor, and PNM have been spraying lines with water to try to reduce the problem with buildup.

Last month’s outages and resulting production disruptions sent gasoline futures to a 33-month high. Gasoline for June delivery today rose a sixth consecutive time, gaining 0.3 percent to $3.0569 a gallon at 11:57 a.m. on the New York Mercantile Exchange.

To contact the reporters on this story: Leela Landress in Houston at llandress@bloomberg.net; Barbara Powell in Dallas at bpowell4@bloomberg.net

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

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