A refinery shutdown or turnaround is a scheduled period of non-production during which day-to-day operations cease and the focus is placed on maintenance activities, such as cleaning, inspection, and repair. To prepare for a turnaround, plant employees work around the clock to ensure everything runs smoothly. The shutdown process can be costly for a refinery, both in terms of lost production and additional equipment and labor costs.
Unplanned Refinery outages
Refinery shutdowns and refinery maintenance are common occurrences but they can also be unplanned. While an unplanned shutdown may not result in a sudden outage, the consequences are costly and may affect the entire company. In addition to the immediate cost of shutting down the facility, an unplanned shutdown can have long-term effects, including a negative impact on profits.
Refinery outages often result in temporary price spikes and disruptions of local supply. While there is no statistical correlation between outages and gasoline prices, refinery outages may lead to temporary price rises. Moreover, the outage's impact on prices is also influenced by other factors, including the timing of the outage relative to the peak season, availability of imported products, and market conditions in the prior weeks.
Identifying and preparing for unplanned refinery outages can help refineries avoid them. Predictive maintenance methods can reduce unplanned outages by up to 36%. By understanding component conditions and their likelihood of failure, operators can better plan and schedule outages and repair work accordingly.
Impacts on monthly prices
Refineries are often closed during refinery maintenance periods and unplanned shutdowns can be costly. The majority of those shutdowns occurred due to mechanical breakdowns. Refiners can minimize their downtime and maintenance costs by rescheduling production and implementing planned maintenance around predicted failures.
Refineries are a long-term investment and shutting down is not an easy decision. It takes time to reopen a facility, train workers, and reintegrate into the supply chain. This makes it difficult for investors to make decisions based on short-term data. Meanwhile, reduced refining capacity reduces global fuel production capacity. This has caused fuel purchasers to bid higher prices to secure finished fuel.
Environmental concerns during Refinery Turnaround
Turnarounds at refineries are necessary processes that provide a critical window for refinery maintenance. They are typically conducted every three to five years and can take several weeks to several months, depending on the scope of the project. Turnarounds are a difficult undertaking that requires careful planning and management to ensure that the project will not adversely affect the environment.
While a turnaround can be an opportunity to improve environmental quality and safety, it can also raise new hazards. For example, the proximity of flammable processing equipment, additional workers, and the presence of new chemicals can all increase the risk of an accident or other adverse impact. Regardless of the severity of a particular incident, environmental concerns during a refinery turnaround are not something to overlook.
The environmental oversight team is a key part of the turnaround process. They ensure the units are clean, handle spills, and exercise stop-work authority. They ensure that the right PPE is used and that the correct procedures are followed. They also conduct regular checks on the crews to ensure that everything is running smoothly.
Planning ahead for Refinery Shutdown
Refineries are undergoing a wave of refinery shutdown. In the past two years, five refineries have shut down, reducing refining capacity by five percent and removing an estimated one million barrels per day from the market. This leaves the remaining refineries struggling to meet demand. As a result, the White House's desperate efforts to reduce gas prices are having little effect.
It has to go offline for refinery maintenance and turnaround on a regular basis. This results in reduced supply, which ultimately drives up the price of fuel for consumers and wholesalers. Ultimately, refineries have an effect on the entire system, and the smallest disruptions can create supply and demand restrictions that can be catastrophic.
