- SAN ANTONIO (Reuters) - Valero
Energy Corp. (VLO.N: Quote, Profile, Research) Chairman and Chief Executive
Bill Greehey said Hurricane Rita's impact on U.S. crude oil production
and refining could be a "national disaster."
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- "If it hits the refineries, and we're short refining
capacity, you're going to see gasoline prices well over $3.00 a gallon
at the pump," Greehey said in a Tuesday night interview.
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- Valero became the largest U.S. refiner earlier this year
when it completed the purchase of Premcor Inc. Valero operates refineries
in Port Arthur, Houston, Texas City and Corpus Christi, Texas -- all potentially
in the path of Hurricane Rita.
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- "It's going to be coming across the (U.S.) Gulf
(of Mexico)," Greehey said. "There's a lot of oil platforms,
oil rigs, (natural) gas platforms, gas rigs. It could have a significant
impact on supply and prices, and then, depending on what it does to the
refineries, there are still four refineries that are shut down. So this
really is a national disaster."
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- Refineries in Houston and Texas City process 2.3 million
barrels of crude oil or 13.5 percent of daily U.S. refining capacity. The
Beaumont-Port Arthur, Texas, refineries account for another 1.1 million
barrels in refining capacity.
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- Based on Rita's current forecast path Texas City, Houston,
Port Arthur and Beaumont could be lashed by high winds and heavy rains
from Rita's northeast quadrant, which often packs the highest winds in
a hurricane.
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- Valero announced on Wednesday morning it would reduce
production at its Houston and Texas City refineries to prepare for the
hurricane.
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- "You've got refineries that will start shutting
down in anticipation of the hurricane, and then if any of them have permanent
damage, we're going to be dependent on imports. Following Katrina, this
is really serious."
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