Refiners Check for Damage After Hurricane Harvey
August 26 2017 - 1:54PM
Dow Jones News
By Dan Molinski
Important U.S. refineries along the Texas coast are checking for
possible damages Saturday after Hurricane Harvey barreled into the
state as a monstrous, Category 4 storm.
Many refineries near the eye of the storm, including two owned
by the U.S.'s largest refiner, Valero Energy Corp. (VLO), had shut
down plant operations before the storm's arrival for safety reasons
and to allow employees to evacuate with family or take other
steps.
"Valero's Corpus Christi and Three Rivers refineries are
conducting a thorough assessment of refinery status and potential
impacts from Hurricane Harvey's landfall," Valero said in a
statement Saturday. Those two refineries can process a combined
380,000 barrels a day.
Valero didn't say when the refineries may restart, but said it
continues to track the storm, adding its other Gulf Coast
refineries are still operating.
Data-tracking firm Genscape estimates a total of more than
800,000 barrels a day of refining capacity was taken offline ahead
of the storm. The main closures were at refineries near Corpus
Christi that faced the brunt of the storm, including those owned by
Valero, and others owned by Venezuela's Citgo and Wichita,
Kan.-based Flint Hills Resources. By shutting down refineries
before the storm's powerful arrival, refiners avoided possibly
being forced to quickly power down in a risky manner due to
electricty outages or other problems.
In all, the Texas Gulf Coast region is the largest fuel
producing region in the U.S. with 17 refineries and about 5 million
barrels a day of capacity, according to the U.S. Department of
Energy.
Hurricane Harvey has since been downgraded to a Category 1 by
the National Hurricane Center, and may drop further to tropical
storm status, though officials warn heavy rain and strong winds
could continue for days.
Refineries near Houston have avoided a direct hit from the
hurricane, though officials at the National Hurricane Center say
they remain in a danger zone that is subject to severe flooding in
the coming days.
LyondellBasell's (LYB) 264,000-barrel-a-day refinery along the
Houston Ship Channel continues to operate Saturday, albeit at a
reduced rate due to logistical constraints in the ship channel, the
company said.
"But [the reduced rates is] not due to the impact of storm on
the plant itself," it added. "There are no operational issues
affecting refining rates at this time."
Exxon Mobil Corp.'s (XOM) Gulf Coast refineries, including its
large, 560,000-barrel-a-day Baytown refinery outside Houston, and
the 365,000-barrel-a-day Beaumont refinery east of Houston, "are
still operating as normal," spokeswoman Suann Guthrie said in an
email.
Concerns over Texas refineries' closures and the impact on
overall U.S. fuel supplies caused gasoline prices in futures
markets to whipsaw in recent days. The RBOB October gasoline
contract price spiked nearly 10 cents a gallon on Wednesday and
Thursday, to $1.59/gallon. But on Friday, the price dropped back to
$1.54/gallon as some investors felt the hurricane impact on a
still-oversupplied market might be short-lived.
Write to Dan Molinski at dan.molinski@wsj.com
(END) Dow Jones Newswires
August 26, 2017 13:39 ET (17:39 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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