MOSCOW (MRC) -- A refined products supply gap on the US East Coast created by a massive fire at a Philadelphia refinery in late June will be filled by shipments from the Gulf Coast region and Europe, reported Reuters with reference to market sources.
The fire completely destroyed the alkylation unit at Philadelphia Energy Solutions Inc’s oil refinery, the largest refinery on the East Coast.
The destruction of the unit, coupled with damage from the fire that ripped through the 335,000 barrel-per-day (bpd) refining complex, could force the 200,000 bpd Girard Point section of the two-section complex to remain shut for an extended period.
PES has since declared a force majeure on some gasoline deliveries, sources said.
Details on the extent of the damage and the amount of supply affected remain unclear, calling into question how much supply actually needs to be sent to the region.
Even when Girard Point restarts, it will run at reduced rates due to the loss of the alkylation unit, two sources told Reuters on Sunday. It could take several years for the company to rebuild the unit.
The arbitrage to ship from Europe to the East Coast has opened further since the fire, market participants said.
However, the arb did not open as wide as some expected because several vessels previously had been fixed and because of high inventories in the United States, according to data intelligence firm Kpler.
Gasoline loadings out of Europe from June 24 to June 30 currently total 535 kilotonnes, a 16.5% increase week-on-week, Kpler data showed.
Additionally, the largest US products pipeline, Colonial Pipeline, which connects Gulf Coast refineries with markets across the southeastern and eastern United States, has additional capacity available into its Linden, New Jersey delivery point, the company said in a statement.
The Gulf Coast currently has ample supply. Gasoline stockpiles totaled 84.6 million barrels in early June, the highest on record seasonally, according to US Energy Information Administration data.
MRC