Power, flooding trouble hits two NJ refineries; others restart

The second-largest refinery on the East Coast has suffered "some" flooding and a power outage because of Hurricane Sandy, while two smaller plants also lost power, as glitches threaten to slow the recovery in fuel supplies.
While the region's biggest plant, in Philadelphia, and several others were ramping up operations after escaping damage, other facilities, pipelines and terminals continued to struggle to restore supplies that had slowed to a trickle.
Phillips 66 said there was "some flooding in low-lying areas" of its 238,000-barrels-per-day Bayway, New Jersey plant, which had been shut on Monday as a precaution. The plant remains closed, the company said, and utility PSE&G said power was likely to be restored only in 24 to 48 hours.
News of trouble at Bayway, nicknamed the "gasoline machine" for its key role in supplying motor fuel to the New York City area, pared losses in gasoline futures, which had fallen by more than 2 percent as output recovered elsewhere.
Other power-related glitches also surfaced after the storm, which left more than 8 million customers without electricity.
As the storm moved north, a power outage shut Imperial Oil's 121,000-bpd Sarnia, Ontario refinery, but the company said it expected to restart units later in the day.
Hess Corp's 70,000-bpd Port Reading, New Jersey refinery, which had also shut ahead of Sandy, lost power and had no time frame for restarting.
Colonial Pipeline, a conduit that supplies as much as 15 percent of the East Coast's 5.2 million bpd of gasoline, diesel and fuel demand from Gulf Coast refiners, said the line had suffered no operational damage, but it had lost power at its Linden, New Jersey tank farm. It is bringing in portable generators to resume pumping fuel back to the region.
The flooding at Bayway, which had been seen by experts as the most vulnerable to Sandy's record 13-foot (4-meter) storm surge and subsequent power outages, is a potential second nightmare for Phillips 66, which had struggled to restore its Alliance, Louisiana refinery after Hurricane Isaac in August. That storm pushed more than 2 feet of floodwater into the plant.
PHILLY PLANTS SEEN OK
Barring major damage, most experts expected the region's fuel supplies could bounce back quickly after being almost completely halted ahead of Sandy, which came ashore on Monday evening with winds of up to 90 miles per hour (145 km per hour) and the storm surge, causing widespread power outages.
Benchmark New York gasoline futures prices, which rallied more than 6 percent ahead of the storm as traders feared a disruption in supplies, were still down 1 percent or three cents on Tuesday as the focus shifted to the likely cut in fuel consumption due to grounded flights and empty roads. U.S. crude oil futures rose slightly, reversing Monday's dip.
"For the moment you have a big black hole where there used to be oil demand," said Credit Suisse oil analyst Jan Stuart. He said 80 percent of the region's demand in the New York metropolitan area had been affected somehow.
"In the end, the demand deficit outweighs the supply deficit."
Airlines had canceled more than 15,770 flights in the past four days, flight-tracking service FlightAware said. Jet fuel consumption of an estimated 170,000 bpd at the three major New York area airports ground to a halt.
One trader offering to sell physical cargoes in the New York Harbor market found no buyers on Monday.
Operations in the Philadelphia area appeared set to resume quickly. Philadelphia Energy Solutions' 330,000-bpd refinery, the biggest in the region, escaped damage and was restoring operations, the company said, confirming an earlier Reuters report.
Industry intelligence group Genscape said its cameras detected the restart of key crude and vacuum distillation units in the Point Breeze section of the plant.
Delta Air Lines subsidiary Monroe Energy's 185,000-bpd Trainer, Pennsylvania plant continued operating through the storm, and was expected to reach full rates next week after a maintenance overhaul, a source said.
Major ports that supply the area with some 1 million bpd of imported fuel were starting to reopen. The Port of Boston opened without restrictions and was expected to unload a gasoline cargo later on Tuesday, an official said.
(Reporting by Janet McGurty; Additional reporting by Jonathan Leff and David Sheppard in New York, Jeffrey Jones in Calgary; Editing by Michael Urquhart, Chizu Nomiyama, Leslie Gevirtz and Dale Hudson)