Marathon Garyville refinery runs reduced post fire

Market: Crude oil, Oil products
27/08/23

Marathon Petroleum's 596,000 b/d Garyville, Louisiana, refinery was running at reduced rates Sunday following a 25 August naphtha tank fire that shut some units in the plant.

Operators at the refinery, one of the largest in the US, are evaluating the return to normal operations, according to the company as of 1pm ET today. Marathon shut some units closest to the fire on Friday, but did not close the plant entirely.

"The response team continues to monitor and maintain control of the impacted area at our Garyville refinery," a company spokesperson said in an email. Minor, heat-related injuries have been reported by some of the responders.

Marathon, the US Environmental Protection Agency and the Louisiana Department of Environmental Quality are all conducting air monitoring in St John the Baptist Parish, where residents within a two-mile radius of the plant were evacuated Friday morning. The evacuation order was lifted Friday afternoon.

ULSD nears 7-month highs

US Gulf coast distillate, gasoline and blendstock markets were mixed Friday, with ultra-low sulphur diesel (ULSD) prices closing up by 16¢/USG to $3.24/USG, the highest since 26 January.

Garyville has been a regular supplier of diesel to Europe in the past year, so a prolonged outage could cause ripple effects in those markets.

Gulf coast wholesale and retail asphalt prices were steady last week, but Marathon Garyville is one of the largest asphalt producing refineries in the US. A prolonged shutdown could tighten asphalt supply and raise wholesale Gulf coast prices, especially if coker yields and paving demand remain strong.

Gulf coast gasoline markets held steady Friday as few buyers and sellers emerged on a new cycle that does not schedule until 30 August.

Market participants told Argus the Garyville fire had minimal effect on reformate prices, which due to lingering poor demand for naphtha, have pressed higher by 58¢/USG since early July. Reformate and naphtha have an inverse pricing relationship.

WTI crude futures rose 1pc on Friday but were down on the week as the fire at Marathon Garyville added to domestic and foreign economic concerns.

The incident marks the second Louisiana naphtha tank fire at a refinery this summer after a 3 June lighting strike started a fire at Calcasieu Refining's 136,000 b/d Lake Charles, Louisiana, plant. Calcasieu said last week it planned to restart operations by the beginning of September.

By Nathan Risser

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