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Phillips 66 PSX is planning to repair and restore operations of its Alliance refinery in Louisiana as damages caused by hurricane Ida kept it from restarting normal activities, per a report by Reuters.
The company does not plan to rush repairs and will proceed steadily in accordance with refining economics and the availability of resources needed.
The Alliance refinery has been struggling with insufficient power for the temporary pumps to drain water from the facility. Phillips 66 started the clean-up process as most of the floodwater had been pumped out of the refinery. The repair work might take several months to complete.
The Alliance refinery has been one big headache, either due to the hurricanes or low profitability. In August, Phillips 66 announced plans to divest the 255,600-barrels-per-day Alliance refinery and began meeting with potential buyers. This was due to continued losses as the demand for gasoline and jet fuel declined massively, owing to the coronavirus pandemic.
Beside this, power outages and shutdowns caused by major hurricanes kept the company from restoring normal operations at the refinery. The company was uncertain whether to invest in major repairs or shut down the facility as damages from the storm were severe. As a result, a high-cost repair and Hilcorp’s interest in the facility resulted in widespread speculation that Alliance will never reopen as a crude refiner.
Phillips 66 plans to advance its businesses in renewable diesel, hydrogen and materials for electric-car batteries. Even before the hurricane’s landfall, the company planned to divest the refinery due to an uncertain future for motor fuels as the economy is still in a pandemic-induced period of reduced refined product demand.
Company Profile & Price Performance
Headquartered in Houston, TX, Phillips 66's operations involve refining, midstream, marketing and specialties, and chemicals.
Shares of the company have underperformed the industry in the past six months. Its stock has declined 11.6% against the industry’s 1.2% growth.
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Zacks Rank & Stock to Consider
Phillips 66 currently carries a Zack Rank #3 (Hold).
Some better-ranked players in the energy space are Eni SpA E, Goodrich Petroleum Corporation GDP and Oceaneering International, Inc. OII, each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Eni’s earnings for 2021 are expected to increase 27.1% year over year.
Goodrich’s earnings for 2021 are expected to rise 25.3% year over year.
Oceaneering’s earnings for 2021 are expected to surge 212.1% year over year.
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Goodrich Petroleum Corporation (GDP) : Free Stock Analysis Report
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