COMMERCE CITY, Colo. -- One of Colorado's two refineries that turn crude oil into gasoline and diesel will be shut down for a month beginning October 1, possibly squeezing fuel supplies and pushing up prices at pumps, reported The Rocky Mountain News.
Owner Suncor Energy Inc. said the planned shutdown for maintenance work has been scheduled for October because that month typically sees low demand for gasoline from drivers.But a refinery customer, Gray Oil Co., a Denver-based wholesale buyer of gasoline and diesel, is concerned. Shutting down the refinery [image-nocss] could hamper fuel supplies that already are tight, Bryant Gimlin, energy risk manager at Gray Oil, told the newspaper.
Also, given this year's expected bumper crop of corn in October, the shutdown could make it hard to meet diesel demand from truckers, said the report.
The two Commerce City refineries together have a combined capacity of more than 90,000 barrels a day, supplying about a third of Colorado's gasoline and diesel fuel demand. The refinery being shut down for a month processes 30,000 of those barrels, according to the report.
Colorado has seen record pump prices in the late spring and summer, mostly because of refinery shutdowns, some planned and others unplanned, due to floods or fires. A new refinery has not been built in decades, putting pressure on the existing ones to meet the growing demand for fuel. So any shutdown stirs concerns.
October is a busy month. Construction companies try to finish up projects before winter, [and the] agriculture harvest will increase the demand for diesel from crop transporters, Gimlin said. From our standpoint, October is not a good time for a shutdown.
Suncor said that during the shutdown, the refinery will honor its supply contracts with long-term customers. The company has informed the spot buyers to make alternate arrangements, said Steve Douglas, Suncor's general manager of marketing.
Is there generally an impact on the market? Yes, Douglas told the paper. What we try to do is have this maintenance at low-demand times of the year, either at early spring or in the fall, as opposed to peak driving seasons. We would never do this in July or August.
Suncor bought the refinery from Valero for $30 million in 2005 to complement the other refinery it bought in 2003 from ConocoPhillips for $150 million, the report said.
Of the 90,000 barrels a day processed, 45% are turned into gasoline, 30% into diesel fuel and the rest into heavier byproducts such as asphalt.
Suncor also owns the 45 Phillips 66 gas stations in Colorado.
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