Adds detail from Citgo
ExxonMobil trimmed throughputs today at its 348,000 b/d refinery in Beaumont, Texas, as record flooding disrupted 17pc of US refining capacity supplying the eastern US and markets overseas.
Companies were evaluating 720,000 b/d of refining capacity that remained shut in Corpus Christi, where Hurricane Harvey brought pummeling winds and an estimated 12-foot storm surge as it made landfall late 25 August. And record rains of flooding the Houston area have shut or reduced throughputs at another 2.4mn b/d of refining capacity. Storms have dropped almost 40 inches (1m) of rain in the Houston area since 24 August, and more than two feet of rain along the Houston Ship Channel, according to the National Weather Service.
It could take weeks or months to evaluate and restore flood-damaged refineries, depending on conditions, said John Auers, executive vice-president at Turner, Mason & Company consulting.
"Most damage is usually water, even in the strongest hurricanes," Auers said.
"Weather-related impacts" led to operational issues that reduced rates at Beaumont, the company said. ExxonMobil reported shutdown work complete at its 557,000 b/d Baytown refinery, the third-largest refiner on the Texas coast and fourth-largest in the US. Marathon Petroleum's 585,000 b/d Galveston Bay refinery in Texas City, Texas, the region's second-largest, and LyondellBasell's 268,000 b/d Houston refinery reduced rates. Petrobras subsidiary Pasadena Refining's 100,000 b/d refinery in Pasadena, Shell joint venture 340,000 b/d refinery in Deer Park and Phillips 66's 247,000 b/d refinery in Sweeny also shut.
Corpus Christi refiners evaluated restart plans. Valero said it found no significant damage at its 200,000 b/d Corpus Christi and 95,000 b/d Three Rivers refineries. Venezuelan oil firm PdV's subsidiary Citgo was evaluating equipment and supply options at its 165,000 b/d refinery there. Flint Hills Resources did not comment on the status of their 260,000 b/d refinery.
But undamaged equipment would not run [without supply]( https://direct.argusmedia.com/newsandanalysis/article/1523977). The Port of Corpus Christi planned to reopen by the end of the week after clearing debris left by the storms and domestic crude pipelines remained shut. The Port of Houston did not have a restart estimate.
Federal regulators relaxed blending requirements to improve supplies, allowing gasoline with higher vapor volatility and diesel with lower emissions quality to be used throughout eastern Texas until 15 September. An extended outage could spread supply constraints to other markets. Colonial Pipeline today shut its Cedar Bayou distillate injection point for its 1.1mn b/d Line 2 moving product from the Houston area to a terminal and line connections in Greensboro, North Carolina, a major path for US Gulf coast products to the New York Harbor market.
Regional refiners have also increasingly supplied Mexico and South American markets now disrupted by shipping and production interruptions.
Houston refiners that did not face strong winds will still need to inspect for damage. Floodwaters can contaminate stored tanks of fuels and refinery feedstocks or carry away insufficiently full tanks. Both Phillips 66 and Valero reported storage tank damage in the Houston area, and Phillips 66 shut its Pasadena refined products terminal.
Companies will examine electrical equipment that form a kind of nervous system connecting control centers to operating units for damage. Other minor but vital electrical equipment — the myriad pumps, compressors and turbines that help units move crude into finished products — could suffer damage if submerged.
Insufficiently dry reactors, boilers or other units can cause corrosion problems, said Russ Mehl, a refining expert with the Energy Management Institute. Vapor recovery units susceptible to water damage could also trigger emissions violations during restarts, he said.
It can take days to clear water and additional time to evaluate equipment. Equipment replacements would then add more time.
Flood damage shut the now 225,000 b/d Meraux refinery for roughly 10 months following Katrina. Other, less uninundated refiners shut for weeks after the storm.
But Texas refiners had so-far avoided catastrophic fires, spills or explosions that can follow natural disasters, Auers said.
"I am encouraged that there have not been any major, catastrophic-type incidents," Auers said. "That is why you shut them down."
