Katrina Recovery to Strain Supplier Resources

As the damage estimates from Hurricane Katrina come in, it appears the reconstruction efforts required in the Gulf Coast region will be more significant than originally anticipated and will affect every corner of manufacturing, according to a report by the ARC Advisory Group (www.arcweb.com). As such, the analyst firm predicts many automation suppliers may find themselves working overtime to provide the products and services needed to support the rebuilding of manufacturing facilities.

ARC reports that four Gulf Coast oil and gas refineries, representing about a half of the total capacity that was lost in the wake of the hurricane, are still shut down. These include:
• Chevron”s 325,000 BDP refinery in Pascagoula, Miss.
• Murphy Oil”s 120,000 BDP refinery in Meraux, La.
• Conoco Phillips” 247,000 BDP refinery in Belle Chasse, La.
• Chalmette LLC”s 190,000 BDP refinery in Chalmette, La.

Meanwhile, ARC says all Marathon refineries are now operating at capacity, including the Garyville, La. site. Marathon Pipeline LLC is said to be returning to normal operations, as well as several major natural gas pipelines, including those owned by El Paso and Loews Corp. The Colonial Pipeline, a major refined products pipeline system, is operating, but at a flowrate somewhat below its 2.3 million BDP capacity, notes ARC.

According to ARC, refinery production has ramped up from what was almost a total shutdown and is now at around 50 percent of total capacity; natural gas production has resumed to almost 60 percent of total capacity; and the Louisiana Offshore Oil Port (LOOP) has also resumed operations.

ARC predicts rebuilding in the manufacturing sector will extend beyond oil and gas to include electric power generation, transmission, and distribution infrastructure, as well as water treatment facilities. ARC says the impact will also be felt by manufacturers that must provide goods and services to aid the reconstruction effort. For automation suppliers, ARC says the phone calls are already coming in from customers that have lost critical manufacturing infrastructure and need to rebuild as soon as possible. Control systems on offshore platforms need to be replaced, and instrumentation and valves need replacement and repair before plants can be restarted, says ARC. As a result, the analyst firm predicts automation suppliers will be faced with a short-term spike in demand, while at the same time they try to maintain support for existing customers. Systems integrators and engineering firms will also be faced with a strain on resources in the region, says ARC.

— Flow Control Staff