The fertilizer production facilities of Coffeyville Resources Nitrogen Fertilizers LLC have resumed operation at full rates after startup procedures were initiated on July 13, a company spokesman said last week. Steve Eames told Green Markets that the company would resume ammonia shipments to its customers at midweek, and UAN shipments would commence shortly thereafter.
Coffeyville also announced on July 18 that operations at its refinery are expected to resume by mid-September. Both the refinery and the nitrogen facility were shut down on June 30 when the rain-swollen Verdigris River overtopped nearby levees and flooded the complex and the town of Coffeyville (GM July 9, p.1). While the refinery was inundated with water ranging in depths from two to six feet, Eames said the fertilizer operations are located on higher ground, and as a result experienced flooding ranging from four feet in some areas to none at the plant’s air separation facility.
Coffeyville Resources Refining & Marketing LLC also announced on July 19 a Residential Purchase Program, under which the company will offer to buy residential properties in the city that were most affected by the flood and subsequent spill of more than 71,000 gallons of crude oil from the refinery. The program is voluntary for homeowners, who will be given the option to sell their residential property at a price based on the market value prior to the flood. Coffeyville Resources estimates that it will offer to purchase 300 residences under the program.
The company said it and the City of Coffeyville “believe this program will speed recovery efforts within this flood affected area and will help families reestablish their lives.” Coffeyville Resources said an announcement would be made early next week showing the residential area of the city that qualifies for the program, and will also provide further details on the purchase price mechanism to be used. Those seeking more information about the Residential Purchase Program can call 1-800-958-5380.
The company cited a list of repairs that were completed to bring the fertilizer plant back on line, including replacing or repairing 30 percent of all electric drives in the entire plant; repairing 60 percent of the plant’s motor control centers, with the scope of work ranging from cleaning to complete replacement; refurbishing 100 percent of distributive control systems and programmable logic controllers, which included component replacement, cleaning, and reprogramming; and repairing the main control room, including the removal of silt, replacing lower walls, repainting, and refurnishing. Repairs to rail and truck loading tracks were expected to be complete by the middle of the week, allowing first shipments to customers as regional rail lines return to more normal operations.
“With this rapid return to production and because of the seasonal nature of our business, we expect to meet all commitments to our customers,” said Kevan A. Vick, executive vice president and general manager for Coffeyville Resources Nitrogen Fertilizers. Added Jack Lipinski, Coffeyville Resources CEO, “Our gratitude goes out to all our employees, contractors and vendors working together to safely bring our operations back to normal. This kind of teamwork, as well as the strong backing we have received from our business partners, customers and our sponsors, is invaluable.”
Regarding the refinery, Keith Osborn, executive vice president and general manager, said the company was fortunate that preliminary estimates indicated “no major damage to our large, engineered equipment and processing units.” The refinery did sustain damage to a large number of pumps, motors, and control equipment, however, which Osborn said would require “extensive repairs.”
While the quick fertilizer startup was good news for the company, last week also brought the announcement from several law firms that additional defendants have been added to a class action lawsuit over the flood-related oil spill from the refinery.
Parker Waichman Alonso LLP, Hutton & Hutton Law Firm LLC, Neblett, Beard & Arsenault, and Becnel Law Firm LLC announced on July 16 that Coffeyville Acquisition LLC – an entity described by the firms as principally owned by Gold- man Sachs Group Inc., its subsidiary J. Aron & Company, Kelso & Company and/or its affiliates – was named as a defendant in the suit. Also named were CVR Energy Inc.; Coffeyville Group Holdings LLC; Coffeyville Refining and Marketing Inc.; Coffeyville Resources Crude Transportation LLC; Coffeyville Resources Terminal LLC; and Coffeyville Resources Pipeline LLC.
An earlier announcement from the firm Hutton & Hutton said damages in excess of $75,000 per class member were being sought in the suit (GM July 16, p.1). Another class action suit, Western Plains Alliance LLC v. Coffeyville Resources, is also seeking claims of more than $75,000 per class member. Eames told Green Markets earlier that the company has adequate insurance, but cannot divulge details of its coverage.
Coffeyville Resources owners Goldman Sachs and the Kelso Funds have been seeking to sell $375 million in stock in the company under the name CVR Energy Inc. The New York Stock Exchange approved the listing June 28, according to a recent SEC filing. Coffeyville Resources said it could not comment on the status of the IPO last week, as it is under a quiet period mandated by the Securities and Exchange Commission.
EPA said on July 14 that no alarming levels of hazardous chemicals have been found in the air or water in Coffeyville. Local reports quoted Rich Hood, a regional public affairs director for EPA, as saying, “The overall bottom line is there is nothing in any of the tests that we’ve seen that should send people screaming for the exits.”
While noting that people should stay out of the water as much as possible due to high levels of fecal matter, EPA said that tests from July 2 to July 5 for pesticides, PCBs, and metal and organic contaminants found no pesticides or PCBs, and no metals at concentrations that would pose a short- or long-term health effect.
“Some organic contaminants, normally found in refined petroleum products, were detected in one sample, but at concentrations that would not be expected to pose a health hazard,” an EPA statement said. The agency also said that air samples from July 2 through July 9 showed acceptable or declining contaminant levels.