A fire has broken out at Exxon Mobil Corp.’s Baton Rouge oil refinery in Louisiana. As a result, production has come to a halt at the fifth-biggest fuel-making plant in the US. Baton Rouge supplies fuels across the southeast of America, up to New York Harbour.
The fire has been extinguished and there were no injuries, Exxon said in a statement. Operations continue at the refinery and chemical plant. The facility is located along the Mississippi River about 80 miles northwest of New Orleans. It can process more than 500,000 barrels of crude a day and accounts for about 15 per cent of Louisiana’s refining capacity.
The blaze erupted in a natural gas line, affecting first one and then all of the facility’s crude distillation towers. As a result, other units such as the catalytic cracker and the chemical plant had to cease operations.
This outage means the refinery needs fewer barrels of crude oil, depressing a market already reeling from the coronavirus crisis in China. But commentators have said this could help ease a gasoline glut in the Gulf Coast, where stockpiles hit record highs in late January.
This is the third blaze in the Gulf Coast region for Exxon in less than a year. It comes after the company posted the worst quarterly profit in almost four years.
Earnings at its refining and chemical business slumped by a combined $6.5 billion in 2019, and the oil giant is pursuing asset sales and even cracking down on employee travel to tide over the turmoil.
Heavy Canadian oil fell from a four-month high after the Baton Rouge refinery shutdown, while Gulf Coast and New York gasoline strengthened. Consumers could feel the impact of higher prices as soon as tomorrow (Thursday 19 February).
Exxon is in the process of a massive expansion of the plastic-ingredient capacity on the chemical side of the Baton Rouge complex that’s scheduled to begin output next year. The combined refining and chemical operations account for one in every 10 jobs in southwest Louisiana region, according to the company.
US refineries handled an average of about 16.5 million barrels a day of crude so far this year, according to Energy Information Administration data.
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