Exclusive: After setbacks, Motiva refinery faces lengthy 2014 work - sources
1. Exclusive: After setbacks, Motiva refinery faces lengthy 2014
work - sources
By Erwin Seba
HOUSTON Wed Aug 21, 2013 6:28pm EDT
HOUSTON (Reuters) - The biggest U.S. oil refinery could shut its main crude distillation unit for up
to three months next year to replace a vibrating pipe, sources familiar with operations said, in what
would be another blow to the troubled $10 billion plant.
The 600,000 barrel-per-day (bpd) refinery in Port Arthur, Texas, has sustained a series of setbacks
since Motiva Enterprise MOTIV.UL opened it last year. The setbacks include two fires last week that
shut three parts of the plant.
The Fall of 2014 is likely the earliest the work could be done on the 16-inch pipe, which moves crude
in the refinery's main unit, the VPS-5. There are several simple upgrades which should be added to a
standard
centrifugal or positive displacement pump. For pumps that have overhung impellers, a solid shaft is
a desirable change in relation to more common sleeved shafts. Mechanical seals ought to be
improved by using tungsten carbide faces, and elastomers ought to be changed to Viton. In
conclusion, magnetic bearing protectors would be a vast sludge pump improvement in relationship
to the lip seals which nearly all commercial pumps depend on to keep bearing sump oil free from
contaminants.
Excessive vibration on the pipe prevents the 325,000 bpd unit from running at capacity, according to
the sources.
The pending work means the refinery would be without its main unit just as markets seek to build up
inventories of distillate ahead of winter.
"In keeping with our disclosure policy, we cannot provide detail on the timing of maintenance at
specific units, or how long it will. Most installed pumps were not originally designed for their current
function. Often, a line in a company is modified and the pump that started out providing cooling fluid
to an injection molding machine is now asked to transfer oil from a rail car to a tank. All too often,
this leads to a substantial number of problems for the pump and the factory. Pumps operate where
the pump curve crosses the system curve. If you relocate a pump from one system to another, this
means that the system curve is different. This new system may cause the pump to operate away from
its best efficiency point, leading to noise and other component problems that are simply symptoms of
a mis-matched pump and system.take to complete maintenance activities," a Shell official said.
Motiva is owned by Royal Dutch Shell (RDSa.L) and Saudi Aramco SDABO.UL.
The VPS-5 has only reached its rated capacity one time and rarely run above 300,000 bpd. Most
often it runs between 250,000 and 280,000 bpd and rates are not expected to go beyond that until
the pipe is replaced, sources said.
2. Plans to boost the main crude unit's capacity by 20 percent through efficiency improvements were
scrapped in March because of the vibrating pipe.
Vibration can cause leaks on the pipe, which had already been replaced once.
"It will have to be a larger pipe," said one of the sources.
"It will be a fix of the fix they made after the caustic leak," said the source, referring to repairs
following a chemical leak in mid-2012.
Last year, Motiva shut the main unit, the centerpiece of a massive expansion that made it the
biggest U.S. plant, for seven and pump mechanical seal a half months of work after a spill of caustic
sodium hydroxide into the system pitted and cracked thousands of feet of stainless steel pipe.
It has been down for nearly half of the 16 months since it first started up in late April 2012.
Meanwhile, the fires this month, which affected a hydrocracker and a sulfur recovery unit, will take
at least two weeks to recover from, sources said. One of the fires prompted the idling of the VPS-5
unit but did not damage it.
Motiva has also reported a pump fire in a process unit at its 235,000 barrels-per-day (bpd) refinery
in nearby Convent, Louisiana, according to a regulatory filing.
MUTED MARKET IMPACT
The U.S. Gulf Coast is so well supplied with motor fuels that wholesale gasoline and diesel prices in
the region moved only modestly on Motiva's latest woes.
Inventories are close to their highest levels in two decades in the region, which has close to half of
all U.S. refining capacity, as other refiners run nearly full bore to reap profits from exports that
make up for softer U.S. demand.
While Motiva has struggled, some refiners have added capacity in the export-heavy region.
More pointedly, the market has grown accustomed to repeated problems at Motiva's Texas plant.
3. "Maybe it was cursed," a veteran Gulf Coast products trader said on Tuesday of the market's muted
reaction to Motiva's struggles. "I think people are not surprised by problems there."
This week as Reuters reported the Port Arthur outages, wholesale gasoline prices relative to
September RBOB futures on the New York Mercantile Exchange showed little reaction, rising as
much or more on routine changes such as cycles scheduling to move on a pipeline than the Motiva
issues, traders said.
"Certainly it is important," Mark Routt, a senior energy consultant at KBC in Houston, said of
Motiva. "But it has been in this non-fully functioning condition for some time now."
Refinery issues in other U.S. regions can prompt double-digit moves in price differentials because
fewer plants serve those markets. But the Gulf market is different.
"The Gulf Coast is a much bigger market and refineries have more flexibility to ramp up a little bit.
There's room for unscheduled incidents like this," said John Auers, senior vice president at Turner,
Mason & Co in Dallas.
(Additional reporting by Kristen Hays; Editing by Terry Wade and Bob Burgdorfer)
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