The world has become dependent on oil and gas to keep our vehicles running and commerce moving. For the most part, refineries take crude oil and refine it into gasoline, diesel and other petroleum products without much thought. However, once in a while, the operators of a refinery will need to bring down all or part of the operations. A shutdown is simply a disruption in the refining process. A turnaround is a planned break in production so that maintenance may be performed. The effects of a shutdown or a turnaround can make a difference in the supply available to retail fuel outlets.
What causes a refinery to shut down?
Several conditions can lead to a refinery shutdown. Shutdowns can happen when a refinery does not have access to cheap natural gas, which is necessary for the refining process. Shutdowns can also happen when crude oil prices get too high. Accidents and natural disasters can shutdown a refinery as well.
Since a refinery shutdown is not planned, a shutdown immediately affects supply. If a shutdown happens during a high season of demand, it can cause fuel prices to increase dramatically. This price increase happens especially if other refineries are shutdown or in a turnaround.
What are turnarounds?
Periodically, refineries need to have preventive maintenance, renovations, or upgrades. These periodic circumstances allow the refineries to ensure safe operations, stay competitive, and meet government regulations. Often, these periodic activities require the refinery to shutdown all or part of the refining production. Planned shutdowns are known as turnarounds.
Most refineries go through a turnaround every three to five years. Each turnaround requires extensive planning and careful coordination of labor and materials. Most often, the shutdown happens when production is at its lowest and required skilled labor is readily available.
Some turnarounds take a few weeks to complete. Others may need a few months. Turnarounds depend entirely on the extent of the project and any problems that occur or are found along the way. Most refineries go through an extensive inspection and testing process during a turnaround. If the inspection or testing identifies a problem, the time may be extended.
The effects of a turnaround
When a refinery goes through a turnaround, it will have effects on the fuel supply in a particular area. Lower supplies of fuel means that fuel prices will increase for wholesalers as well as consumers. Turnarounds also make the entire system susceptible if another refinery goes down due to an unexpected shutdown. This can cause the supply and demand restrictions, already in place due to the planned shutdown, to reach critical levels.
Shutdowns and turnarounds are a fact of life in the fuel supply industry. At Kendrick Oil, we strive to stay on top of these circumstances so that our clients can manage more efficiently during these stressful events. If you want to learn more or have questions about our products or services, call us today at (806) 250-3991. You can also connect via email by clicking on Contact Us. For more information about our company, we welcome you to read more About Us.