Tesoro, Chevron Work To Resume Gas Production

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Tesoro, Chevron Work To Resume Gas Production

HONOLULU -- After initially saying that it could take days to resume gasoline production at its Kapolei refinery following Sunday's earthquakes, Tesoro Corp. told the Star-Bulletin it hoped to start producing gas as soon as yesterday.

Hawaii's other oil refiner, Chevron Corp., however did not offer a time frame for resuming operations, saying only that the company was working through post-earthquake procedures, the newspaper said. "We will continue to proceed when it's prudent to do so," said Albert Chee, a Chevron spokesman.

Hawaii's two oil refineries were working to resume operations after Sunday's earthquakes prompted a shutdown of the only facilities in the state that can turn crude oil into gas. In the meantime, a state official said the state has adequate stores of gasoline.

"There's no shortage of supply," Ed Teixeira, vice director of state Civil Defense, said at a news conference Monday afternoon. "It's adequate ... more than adequate."

Richard Parry, president of Mid-Pac Petroleum LLC, agreed, but with caveats. If people behave normally and don't panic and hoard gasoline, there should be enough gas in storage for a few days at least, Parry said. However, problems could surface if consumers rush gas stations, or if the refineries remain shut down for a long time.

"The worst thing that can happen is people panic and begin hoarding gasoline," said Parry, whose company buys gas from the refineries and supplies it to 55 Union 76 gas stations in the state, including 34 owned and operated by Mid-Pac.

"If people behave normally, it shouldn't be a problem," he said. "As long as demand stays normal, (the lack of new supply) tightens the system, but it shouldn't be a major problem."

As the state's only refiners, Chevron and Tesoro supply virtually all of Hawaii's gasoline, providing it to their own branded service stations and to companies like Mid-Pac and Aloha Petroleum, which operates the Aloha and Mahalo gas stations, the Star-Bulletin said. If the refineries were to stay shut down for more than a few days, Chevron, Tesoro or other companies could address the supply shortages by importing refined gasoline, according to Parry.

But Tesoro's optimistic time frame for resuming gasoline production would eliminate that need. The larger of Hawaii's two refineries, Tesoro's facility can refine about 94,000 barrels of crude oil per day into a range of fuels, including gasoline, jet fuel, diesel and other products. The U.S. Department of Energy's Energy Information Agency estimates that a barrel of oil can produce about 19.4 gallons of gasoline, the newspaper said.

Nathan Hokama, a Honolulu-based Tesoro spokesman, said Monday that the refinery's gasoline unit could be up and running as early as Tuesday. What's more, he said, gasoline inventories at the refinery were "OK."

Sarah Simpson, a spokeswoman at the company's San Antonio headquarters, noted that it might take longer for Tesoro to resume production of other petroleum products.

Chee, the Chevron spokesman, said safety was the company's highest priority.

"We're going to continue to work our processes with safety first and foremost in mind and making sure the integrity of the facility is intact before we proceed any further," Chee told the Star-Bulletin. "Right now, we don't necessarily see any major issues, but certainly we're going to err on the side of caution."

Restoring electricity to the refinery was only a first step, he said, adding "as we all know, (the shutdown) was really a result of an earthquake, so we have different procedures for ourselves when dealing with a seismic impact such as we had yesterday."