Phillips 66: Los Angeles Refinery

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Los Angeles Refinery

The Wilmington Refinery, located in Wilmington, Calif., about 15 miles southeast of Los Angeles International Airport. serves as the back end by upgrading the intermediate products to finished products. The refinery has a crude oil processing capacity of 139 MBD and processes mainly heavy, high-sulfur crude oil. It receives domestic crude oil via pipeline from California and both foreign and domestic crude oil by tanker through a third-party terminal in the Port of Long Beach. The refinery produces a high percentage of transportation fuels, such as gasoline, diesel fuel and jet fuel. Other products include fuel-grade petroleum coke. The refinery produces California Air Resources Board (CARB)-grade gasoline using ethanol to meet government-mandated oxygenate requirements. Refined products are distributed to customers in California, Nevada and Arizona by pipeline and truck.[1] Photo by unzarjones Flicker Creative Commons Attribution-NonCommercial 2.0 Generic (CC BY-NC 2.0)

Description of Los Angeles Refinery

The Los Angeles Refinery is composed of two linked facilities located roughly five miles apart in Carson and Wilmington, Calif., about 15 miles southeast of Los Angeles International Airport. Carson serves as the front end of the refinery by processing crude oil, and Wilmington serves as the back end by upgrading the intermediate products to finished products. The refinery has a crude oil processing capacity of 139 MBD and processes mainly heavy, high-sulfur crude oil. It receives domestic crude oil via pipeline from California and both foreign and domestic crude oil by tanker through a third-party terminal in the Port of Long Beach. The refinery produces a high percentage of transportation fuels, such as gasoline, diesel fuel and jet fuel. Other products include fuel-grade petroleum coke. The refinery produces California Air Resources Board (CARB)-grade gasoline using ethanol to meet government-mandated oxygenate requirements. Refined products are distributed to customers in California, Nevada and Arizona by pipeline and truck.[2]

News and Views on Los Angeles Refinery

January 29, 2015: Heavy Black Smoke Spews from Flare at Wilmington Refinery

The Daily Breeze reported on January 29, 2015 that heavy black smoke billowed across the Harbor Area and South Bay from a flare at Phillips 66’s Wilmington oil refinery after an unspecified emergency interrupted the steam system. Phillips 66 spokeswoman Janet Grothe said the South Coast Air Quality Management District was notified of the incident. Refinery tests found that the flares prevented any harmful air emissions from reaching the surrounding community. “Air monitoring has indicated no off-site impact and the refinery continues to operate,” Grothe said.[3]

October 30, 2014: Phillips 66 Reports Flaring at Wilmington Refinery

Phillips 66 reported flaring at its Wilmington, California refinery, according to a filing with the California Emergency Management Agency. The Phillips 66 refinery has two linked facilities about 5 miles apart in Carson and Wilmington.[4]

August 20, 2014: Phillips Report Flaring at Wilmington Refinery

Phillips reported a flaring event at its refinery in Wilmington, California, caused the release of chemical substance, according to a filing with the California Emergency Management Agency. The refinery has two linked facilities about five miles apart in Carson and Wilmington. The former processes crude oil while the latter upgrades the products.[5]

July 14, 2014: Phillips Reports Loss of Steam at Carson Refinery

Phillips reported its Carson, California, refinery experienced loss of steam resulting in flaring. The refinery has two linked facilities about five miles apart in Carson and Wilmington, California. Reuters, 11:54 July 14, 2014 [6]

July 8, 2014: Representative Hahn Sends Letter to State Fire Marshal about Phillips Violations After Oil Spill

Zamná Ávila reported at Random Length News on July 8, 2014 that Representative Janice Hahn sent a letter to California Fire Marshal Tonya Hoover with regards to the Phillips 66 violations in a recent oil spill requesting an update on the office’s progress in citing Phillips 66 for federal law violations. “The 1,200 gallon oil spill in Wilmington placed the health of hundreds in danger due to a failure to follow federal law regarding pipeline safety,” Hahn wrote. “The families of Wilmington remain uncompensated for the destruction of their property, and the federal government is unable to act until your office cites the company for wrongdoing.” Hahn expressed her disappointment that Phillips 66 had not yet been cited.[7]

July 7, 2014: Phillips Reports Process Upset at Carson Refinery

Phillips reported RP states high sulfur in fuel gas resulted in excess of RQ for SOC (500 LBS in a 24-hour period), according to a filing with the California Emergency Management Agency. [8]

May 26, 2014: Phillips Reports Ammonia Release at Wilmington Refinery

Phillips reported release of anhydrous ammonia at its Los Angeles-area refinery in Wilmington, California, on Monday, according to a filing with state pollution regulators. The filing did not specify whether the event had an impact on production.[9]

March 18, 2014: Crack in Idle Phillips Pipeline Spews Crude Oil onto Wilmington Streets

The Wilmington Press-Telegrapm reported on March 18, 2014 that a crack in an idle Phillips oil pipeline, possibly caused by this week’s 4.4-magnitude earthquake, spewed thousands of gallons of crude oil onto a residential street in Wilmington. “After a thorough investigation of the source, we can confirm the leak is coming from an idle pipeline owned by Phillips 66,” said Phillips spokeswoman Monica Silva. “We are working to stop the leak and have recovered approximately 30 barrels of oil. Clean-up efforts continue.” Silva declined to elaborate on why the unused 10-inch pipeline was filled with crude oil. Normally, when a pipeline is not being used, oil companies will fill it with concrete slurry. However, if they think they may want to use the line again, they try to keep it viable. In this case, the oil may have been stored in the line to keep it from corroding or collapsing, fire officials said. Silva said oil company officials will not say more about the issue until Wednesday.[10]

Rep. Janice Hahn, D-San Pedro, visited the site on Tuesday out of “concern for the safety and well-being of the residents of Wilmington,” she said in a statement. “The harsh, crude oil smell is not only horrible, but can also be potentially harmful to the neighborhood residents and environment.” “As a member of the House Transportation and Infrastructure Subcommittee on Railroads, Pipelines and Hazardous Materials, I plan to make this oil spill incident a priority,” Hahn said. “I have already reached out to the subcommittee to find out what federal actions we can take to ensure that an incident like this will not happen again, and that there is proper oversight with our nation’s pipelines. County Hazardous Materials Specialist Don Miguel Ellis said that Phillips 66 officials were developing a plan Tuesday afternoon to remove the rest of the oil and clean and repair the area. “It’s a significant spill in a public area,” Ellis said. “But health risks are minimal.”[11]

Phillips, which earlier in the day said it was almost positive that it was not to blame for the leak, later took responsibility and put the blame on one of its out-of-service pipes. Janet Grothe, a spokeswoman for Phillips 66, said the company would investigate why oil remained in the pipe, which she said was taken out of service before Phillips 66 acquired it. Los Angeles Councilman Joe Buscaino, who was touring the area, said the pipe had been withdrawn from service in 1998. Don Ellis, a hazardous-materials specialist with the Los Angeles County Fire Department, said that when an underground oil pipeline is withdrawn from use, it is supposed to be capped and the material inside vacuumed out. Although Phillips initially thought the pipe didn't belong to the firm, the company was involved in the cleanup early on "as a good neighbor," Grothe said adding that Phillips' crews would steam clean the street and that repairs would be completed in a week.[12]

February 26, 2014: Phillips 66 Reports Flaring at Wilmington Refinery

Phillips 66 reported flaring at its Los Angeles-area refinery in Wilmington, California, on Wednesday, according to a filing with state pollution regulators. The filing did not specify whether the malfunction caused any production impact.[13]

February 19, 2014: Phillips 66 Reports Unspecified Material Combustion at Wilmington Refinery

Phillips 66 reported an unspecified material combustion due to unknown reasons at its Los Angeles-area refinery in Wilmington, California, on Wednesday, according to a filing with state pollution regulators. The filing did not specify whether the malfunction caused any production impact.[14]

December 31, 2013: Eleven Workers Treated After Hazardous Materials Leak at Wilmington Refinery

The Daily Breeze reported on December 31, 2013 that eleven workers were briefly treated for possible respiratory problems on December 31, 2013 following a sulfur dioxide leak at the Phillips 66 Refinery in Wilmington. A firefighter at the refinery said the 11 people were workers who had been exposed to sulfur dioxide gas. They were taken to hospitals for emergency treatment in fair condition said Katherine Main of the Los Angeles Fire Department. Other workers were told to shelter in place inside buildings on the refinery. By 11 a.m., the LAFD reported that the situation was “static’’ and there was “no active leak (and) no danger to the community." “All other refinery employees and contract workers have been accounted for and are safe. The area has been secured and the refinery is running under normal operations,’’ said Phillips 66 spokesman Rich Johnson.[15]

October 30, 2013: Garland Says the Option Value to Hold onto West Coast Refineries at Los Angeles and San Francisco is Not High

In answer to a question from Bradley Olsen of Tudor Pickering Holt & Co. Securities, Inc. Garland told analysts at the third quarter earnings conference on October 30, 2013 that the option value to hold onto West Coast Refineries at Los Angeles and San Francisco is not high. "I think in any time we look at an asset and we’re going to let an asset go, if we are going to get value for PSX shareholders, it has to be tax efficient in terms of the transaction itself. And we look at these assets East and West Coast, we’ll put in advantaged crudes, so that we think we can make them better and drive more value ultimately and optionality that thing, we look at these assets both east and west, we don’t have to put a lot of money into these assets," said Garland. "The option value to hold on is not high for us and again they are generating positive cash or generating maybe single-digit returns, but they are adding value to the portfolio overall. So we don’t feel like there it is stressed assets, we just have to move today. So we’ll hold them for some option value. We’ll consider multiple ways to create values with these assets, but in the mean time we’re going to work to make them better."[16]

September 27, 2013: Phillips Reports Flaring at Wilmington Refinery

Phillips 66 reported sulfur dioxide emissions led to flaring at its Los Angeles-area refinery in Wilmington, California, according to a filing with state pollution regulators. [17]

September 5, 2013: Phillips Has Wet Gas Compressor Breakdown at Wilmington Refinery

Phillips 66 reported the breakdown of a wet gas compressor system at its Wilmington Refinery according to a filing with the California Emergency Management Agency. The incident led to sulfur dioxide emissions, the filing said. [18]

August 12, 2013: Carson Refinery Flares Gas

Bloomberg reported on August 12, 2013 that the Carson Refinery refinery reported flaring at 12:40 a.m. local time, according to a notice to state regulators. The same part of the refinery reported flaring on July 29.[19]

July 29, 2013: Carson Refinery Flares Gas

Bloomberg reported on August 12, 2013 that the Carson Refinery refinery reported flaring on July 29, 2013.[20]

June 7, 2013: Phillips Reports Unplanned Flaring at Wilmington Refinery

Phillips 66 reported unplanned flaring at its Wilmington refinery began the morning of June 7 and continued until late night on June 8, according to a filing with the South Coast Air Quality Management District.[21]

May 10, 2013: Phillips Plans to Flare Sulfur Oxide at Wilmington Refinery from May 12 to May 26

Fox Business reported on May 10, 2013 that Phillips plans to flare sulfur oxide and other gases from May 12 until May 26, 2013 according to a filing with the South Coast Air Quality Management District. A Phillips 66 spokesman declined to comment on the refinery's activities.[22]

April 13, 2013: Unspecified Breakdown Causes Flaring at Wilmington Refinery

Phillips reported unplanned flaring due to a breakdown at its Wilmington refinery, according to a filing with the South Coast Air Quality Management District.[23]

April 4, 2013: Fire Extinguished at Wilmington Refinery

Fox Business reported on April 4, 2013 that a small fire in a coking unit at the Wilmington Refinery was put out quickly and caused no injuries.[24]

March 28, 2013: Phillips Shuts Down Leaky Isomerization Unit at Los Angeles Refinery

Bloomberg reported on March 18, 2013 that Phillips shut an isomerization unit on March 18, 2013 at their Los Angeles Refinery after discovering a leak, a person with direct knowledge of the work said. The unit, which makes unleaded gasoline components, may remain down until tomorrow for line repairs, the person said.[25]

February 7, 2013: Phillips Reports Flaring at Wilmington Refinery

Phillips 66 reported a flaring event at its Wilmington refinery February 7, 2013, according to a filing with the California Emergency Management Agency. Operators were investigating the incident, which caused more than 500 pounds of sulfur dioxide to release to the atmosphere. [26]

February 5, 2013: Canadian Crude is Being Transported to Los Angeles Refinery

Reuters reported on February 5, 201 that Tim Taylor, Phillips executive vice president for commercial, marketing, transportation and business development, told the Credit Suisse energy conference that Phillips has begun moving cut-price Canadian crude to its California refineries at Los Angeles and San Francisco via rail. "We're beginning to deliver Canadian crude to our California refineries by rail," said Taylor. Garland told Reuters on January 30, 2013 that Phillips was looking at coiled tube cars that are suited to bitumen in Canada's heavy oil deposits that must be heated in order to flow.[27]

January 30, 2013: Garland Does Not Rule Out a Sale of Los Angeles Refinery

Reuters reports that Greg Garland told investors on January 30, 2013 at the 4th quarter earnings conference that Phillips did not rule out a sale of Phillips two California refineries, one at Los Angeles and one at San Francisco, given challenges with state regulatory requirements and high costs. "We're studying any and all options for California in terms of where do we go long-term in the business," said Garland. "We are doing everything we can to improve it. I don't feel it's a distressed asset. We want to take our time and be thoughtful."[28]

Garland told analysts that Phillips 66 was looking at getting railcars capable of hauling even cheaper Canadian heavy crude to the company's refineries in California. However, he said resistance to such a move was likely. A 2006 California law requiring sharp cuts in emissions has a component that would require refineries to run crudes produced in environmentally friendly ways. Canadian crude production comes with high emissions. Plus, California has the huge Monterey shale, estimated by the U.S. government to have more reserves than the prolific Eagle Ford in Texas or Bakken in North Dakota. But output has been spotty with geology that differs from those other plays. Given those uncertainties, Garland told Reuters in an interview that for the time being, Phillips 66 will focus on improving the California refineries' single-digit returns while studying a possible sale, joint venture or spinoff. "The option value to hold California is zero. It really costs us nothing."[29]

January 30, 2013: Garland Says Phillips Utilization Rate Was Negatively Impacted by Turnaround at Los Angeles Refinery

Greg Garland told analysts at the 4th quarter earnings conference on January 30, 2013 that Phillips utilization rate was negatively impacted by the turnaround at the Los Angeles Refinery as well as turnarounds at Wood River and Borger refineries, and Hurricane Sandy related unplanned downtime at the Bayway refinery. "In refining and marketing, our refining realized margin was $13.67 per barrel with a global crude utilization rate of 91% and a clean product yield of 83%," said Garland. "Lower volumes negatively impacted earnings by $42 million, mainly in the Atlantic basin and the Central Corridor regions, reflecting unplanned downtime due to Hurricane Sandy and plant turnarounds."[30]

November 16, 2012: Planned Flaring to Occur at Wilmington Refinery from November 22 to December 6

Bloomberg reported on November 16, 2012 that planned flaring will take place at its Wilmington Refinery from November 22 to December 4, 2012. “Planned maintenance is under way” at the refinery, Dennis Nuss, a spokesman at Phillips 66’s headquarters in Houston, said by e-mail.[31]

November 8, 2012: Planned Flaring to Occur at Carson Refinery from November 10 to November 23

Nasdaq reported on November 13, 2012 that planned flaring will take place at its Carson Refinery between November 10 and 23, 2012. The flaring isn't associated with equipment breakdown, the filing to government regulators said.[32]

October 31, 2012: California Refineries are in Lower Performing Part of Refinery Portfolio and Must Improve

Tim Taylor was asked at the Phillips Third Quarter Earnings Conference on October 31, 2012 if Phillips' position with its two major refineries in California was sufficiently advantaged to warrant continued participation and replied that when Phillips looks at the West Coast, it's been one of the more challenged markets from a recovery standpoint post-recession. "In California, specifically, it's a tough regulatory environment, as well, so costs are higher. And there is a lot of potential additional costs as new regulations come into effect. That said, it's still a very significant market and we think it's really important to look at how can we get some of these crudes out of the middle part of the country into the West Coast, particularly California. So we're working hard on that to try and change that. The comment I'd make in Washington is that that's got a natural access to the Bakken in North Dakota and Canadian crudes. We separate the Washington piece from the California piece that way. But everyone's working hard to look at some crude solutions for the West Coast to improve its competitive position."[33]

"I think we look at the market and say demand continues to struggle out there, as well, post-recession," added Taylor. "And then I think you look more fundamentally at the operating environment and the costs associated with particularly the environmental regulations. And we think that's going to continue to keep pressure on operations and operating costs out there. So, yes, I would say that from a California perspective it is one of the more challenged parts of our portfolio in terms of the basic value equation. So that's why we're still looking at the crude side of it. And continuing to stay abreast and on top of what it's going to take to comply with things like AB32 to really maintain your operations out there."[34]

Asked if California would still remain part of Phillips' core portfolio Taylor replied that right now California is in the lower performing part of Phillips portfolio. "So I think that if our assessment would become that it's going to be challenged for some period of time, we've either got to find a way to improve that operation or find some other way to deal with that."[35]

October 24, 2012: Phillips Restarts Units at Wilmington Refinery after Power Dip

Fox Business reported on October 24, 2012 that a few units at Phillips' Wilmington Refinery were restarted on October 23, 2012 after experiencing an external power dip from the Los Angeles Department of Water and Power. The Refinery also reported an unplanned flaring event to the South Coast Air Quality Management District.[36]

October 5, 2012: Sources Allege Phillips Delays Work at Los Angeles Refinery to Cash In on Record Profit Margins

The Tulsa World reported on October 6, 2012 that according to two people with knowledge of Phillips Los Angles Refinery maintenance schedule, Phillips 66 has delayed work at its Los Angeles refinery to cash in on record profit margins in California. A six-week maintenance turnaround on the hydrocracker, which makes high-octane gasoline and other lighter oil products, has been put off until at least Oct. 16 from a previous Oct. 9 start date, said the people, who asked not to be identified because the information wasn't public. "With crack spreads this high, it's kind of expected that all will make as much fuel as possible to cash in on the spreads," Tim Hamilton, executive director of the Automotive United Trades Organization. A Phillips 66 spokesman at the company's headquarters in Houston, declined to comment on maintenance plans at the 139,000-barrel-a-day Los Angeles plant. "I can tell you there is no planned maintenance work currently at our Los Angeles refinery," said Rick Johnson.[37]

September 24, 2012: Air Pollution Regulators Probe Day Long Burnoff at Wilmington Refinery

The Contra Costa Times reported on September 24, 2012 that air quality regulators are investigating whether a burnoff of petroleum products at the Phillips 66 oil refinery in Wilmington that lasted for about six hours after a power outage caused a sudden shutdown of all refinery operations could have been avoided. Black smoke billowing out of the refinery's flare could be seen for miles. The South Coast Air Quality Management District received 125 complaints about the smoke that day. Two days later, more complaints streamed in over a chemical odor surrounding the refinery. AQMD spokesman Sam Atwood said investigators believe the smell came from vapors that had leaked from a petroleum storage tank. The refinery was issued a violation last week due to the odors, and will have to either pay a fine or invest in something that benefits the local environment, Atwood said.[38]

September 20, 2012: Facility-wide Shutdown at Los Angeles Refinery

Nasdaq reported on September 21, 2012 that record heat and a power outage on September 15, 2012 forced a facility-wide shutdown at Phillips 66's Los Angeles refinery but that several units have been brought back online and all units are seen back by the end of the week.[39] Nasdaq reported on September 26, 2012 that production resumed on September 21, 2012 after record heat and a power outage on September 15 forced a facility-wide shutdown.[40]

July 22, 2012: Planned Flaring at Wilmington Refinery

Nasdaq reported on July 27, 2012 that maintenace work was completed on July 19, 2012 and that planned flaring took place at the Wilmington Refinery from July 22 to July 25, 2012 according to the South Coast Air Quality Management District.[41]

July 20, 2012: Planned Flaring at Wilmington Refinery

Reuters reported a planned flaring at the Wilmington Refinery on July 12, 2012.[42]

July 12, 2012: Planned Flaring at Wilmington Refinery

Reuters reported a planned flaring at the Wilmington Refinery on July 12, 2012.[43]

July 8, 2012: Wilmington Refinery in Planned Overhaul

Reuters reported on July 8, 2012 that the Wilmington Refinery was in a planned overhaul which shut the hydrogen plant, according to a notice the refinery filed with California pollution regulators. The work triggered flaring at the refinery and the release of sulfur dioxide, according to the notice filed with the California Emergency Management Agency.[44]

July 3, 2012: Flaring Reported at Wilmington Refinery

Reuters reported a flaring at the Wilmington Refinery on July 3, 2012.[45]

June 29, 2012: Upset in Alky Unit at Wilmington Refinery

Reuters reported an upset in the AlkyUnit at the Wilmington Refinery on June 29, 2012.[46] Phillips 66 reported flaring due to an alkylation unit upset at its Wilmington refinery, according to a filing with the California Emergency Management Agency. Operators had secured the release and flaring had stopped at the time of the filing.[47]

June 26, 2012: Sulfur Recovery Plant Down at Wilmington Refinery

Nasdaq reported on June 26, 2012 that a sulfur recovery plant at Phillips 66's Wilmington refinery shut down unexpectedly on June 26, causing a flaring event, according to a California Emergency Management Agency hazardous materials spill report.[48]

May 8, 2012: Work Completed as Los Angeles Refinery

Reuters reported on May 8, 2012 that Phillips 66 finished unspecified planned work at its Los Angeles-area refinery that had begun in April, 2012. The refinery has two linked facilities in the Los Angeles-area: one in Carson that processes crude oil and another five miles away in Wilmington that upgrades the products.[49] Bloomberg Businessweek reported on May 3, 2012 that the Los Angeles refinery was scheduled to flare gases through May 3 as part of planned maintenance.[50]


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