UPDATE 1-U.S. Gulf Coast refiners pare output as pipeline outage continues

·2 min read

(Adds Citgo production cut)

By Erwin Seba

HOUSTON, May 10 (Reuters) - Three U.S. Gulf Coast oil refineries reduced fuel production on Monday as the four-day-old Colonial Pipeline outage limited the ability to move products to market.

Colonial shut its 5,500-mile (8,850-km) pipeline system, the major artery delivering gasoline, diesel and jet fuel to mid-Atlantic and southeast U.S. states from Texas and Louisiana, due to a ransomware attack on Friday.

The pipeline on Monday said it plans a phased resumption of operations with a goal of having most operations on line by Friday. Its systems were halted following an attack by a hacking group the FBI identified as DarkSide.

The largest U.S. refinery, Motiva Enterprises, cut its production by 45%, according to people familiar with the matter. The 607,000 barrel-per-day (bpd) Port Arthur, Texas, plant shut two crude distillation units (CDUs) on Sunday as well as a reformer, sources familiar with plant operations said.

Total SE reduced its gasoline output by about 25% at its 225,500-bpd oil refinery in Port Arthur. The company trimmed its fluidic catalytic cracker (FCC) output and shut a condensate splitter, people familiar with its operations said.

Citgo Petroleum Corp reduced production at its 418,000 barrel-per-day (bpd) Lake Charles, Louisiana, refinery "to maintain as much operational flexibility as possible" during the Colonial outage, the company said in a statement. It did not specify the amount of the reduction.

The largest U.S. independent refiner, Marathon Petroleum , is seeking alternatives for shipping from its Gulf Coast plants in event the pipeline shutdown is extended, said spokesman Jamal Kheiry.

Chevron Corp, which operates Gulf Coast oil refineries in Texas and Mississippi, has continued to supply its U.S. East Coast customers.

"We may experience disruptions in supply based on current inventory levels in our terminals, logistics constraints caused by the outage and customer demand," if the outage continues, said spokesman Tyler Kruzich. (Reporting by Erwin Seba; Editing by Cynthia Osterman)