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Phillips 66 Refinery Won’t Restart for Up to 3 Weeks

A major refinery which supplies the New York gasoline market will remain idled for at least another two to three weeks, as the impact of Hurricane Sandy continues to weigh on the region's energy sector.

David Paul Morris | Bloomberg | Getty Images

Phillips 66 said in a statement late Monday that its 238-thousand barrel per day Bayway Refinery in Linden, New Jersey will remain idled.

"Work to repair or replace damaged equipment, primarily electrical equipment impacted by saltwater during the storm surge from Hurricane Sandy, is already under way.The refinery's processing units are in good condition."

The Bayway facility was among the first to see power return following the storm, but this was the first timeline Phillips 66 gave for restarting the facility nicknamed "the gas machine" by energy analysts, because it is a key producer for the New York area.

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"It's been more than a power outage. It's actually been infrastructure flooding and damage," says Andy Lipow, president of Lipow Oil Associates.

The delay in restarting Bayway and continuing outages of major fuel terminals in the Newark, New Jersey will likely keep gasoline supplies tight in the New York and New Jersey area through the end of November.

Some of those supplies will be made up in the next 7-10 days by barges out of the Gulf Coast being allowed to transport imported fuel to the Northeast, following last week's lifting of the Jones Act in the wake of the storm.

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But the bottleneck will continue if major terminals in the area remain down.

In addition to the repairs at the refinery, Phillips 66 says it is also in the process of repairing its dock in order to resume receiving barge shipments.

"I think the service stations are going to continue to improve throughout the week," as power returns, Lipow explained. "But I don't think things return to normal for several weeks at the terminal level."

Follow Bertha Coombs on Twitter: @coombscnbc

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