USA’s Phillips 66 Plans Starting Restoration of its shut Alliance, Louisiana Refinery

USA-based multinational, refiner and energy producer, Phillips 66, has planned to commence repair works at its storm-hit two units at Alliance, Louisiana refinery, that had remained shut after the landfall made by Ida in late August.

The repair activity, set to begin in January 2022, will be covering a 250,000-bpd day crude distillation unit, a 120,000-bpd fluidic catalytic cracking unit for gasoline production, a 33,000-bpd reformer, and a 70,000-bpd diesel hydrotreater. In addition, the damaged electrical system will also be put under repair to enable the power supply to all the equipment.

The Alliance refinery is an attractive midstream asset that receives pipeline transported domestic crude oil from the Gulf of Mexico and U.S. light oil is supplied to it by marine transport. The Louisiana Offshore Oil Port enables the transport of foreign crude oil through a pipeline to the Alliance refinery. The company has opened doors to the sale of the refinery post-repair or might consider closing it.

Crude oil is a hydrocarbon-rich liquid extracted from underground reservoirs through the drilling process. On transportation to the refineries, crude oil is subjected to thermal cracking in hot furnaces, and then undergo further processing which transforms it into several important petroleum products like diesel, gasoline, kerosene, LPG, jet fuel etc, petroleum naphtha, and vital petrochemical feedstocks i.e., ethylene and propylene which form the building block for many industrially important petrochemical products.

As per ChemAnalyst, despite the scheduled restoration of the Phillips 66 Louisiana refinery, its future looks uncertain. The company’s pending decision on the refinery’s future has instilled anxiety among the employees towards their job security, simultaneously creating pressure over the future crude market fundamentals. As the USA is already suffering from turbulence in the market from the escalating crude oil prices, the maximum utilization of the country’s installed capacities is most required at this time to bring stabilization in crude oil supply to the downstream sectors and cool off the rising crude oil prices.