<article><p class="lead">Refiners are still assessing the damage caused by the category 4 Hurricane Laura that slammed the Texas/Louisiana border last week, with traders and cement makers giving varying estimates of the storm's petroleum coke supply impact.</p><p>Estimates of the amount of coke production lost range from as little as 100,000t to as much as 300,000t. It is unclear how long some refineries could be down, as some are still waiting for electricity to be restored. But it is also difficult to gauge how much production is being lost each day as many refiners were not operating at full capacity prior to the storm. </p><p>The Lake Charles, Louisiana, and Port Arthur, Texas, ports combined shipped out roughly 534,500t of green coke in June, the latest data available from the US Census Bureau. If refineries were producing at a similar daily rate, two weeks of downtime in these two regions would equal about 250,000t lost. Most market participants calculate between 200,000t-300,000t of lost coke production by the time all refineries are fully back online.</p><p>One refiner estimated that its facility alone could lose 100,000t before it gets back to previous rates. </p><p>About 16pc of US refining capacity reduced crude processing or idled units before the powerful storm made landfall on 27 August. Most of this capacity had already begun restarting by 29 August. Refineries in Texas largely avoided the worst of Laura's 150mph (240 km/h) winds, although even those that escaped damage may still take a week or two to carefully restore operations. </p><p>About 810,000 b/d of western Louisiana refinery capacity <a href="https://direct.argusmedia.com/newsandanalysis/article/2136895">could remain off line for weeks</a> as crews repair damage to the facilities and the surrounding electrical grid. Regional power grid utility Entergy <a href="https://direct.argusmedia.com/newsandanalysis/article/2138076">estimated today</a> that "catastrophic damages" to nine transmission lines and surrounding power infrastructure would require two to three weeks of work to return power to the first customers in the Lake Charles area. Many power structures in the area were beyond repair, the company said. "This is not a restoration," Entergy Louisiana chief executive Phillip May said. "It is almost a complete rebuild."</p><p>Citgo has <a href="https://direct.argusmedia.com/newsandanalysis/article/2136851">reported wind damage</a> at its 425,000 b/d Lakes Charles refinery and could not yet provide a timeline for repairs. Phillips 66 had yet to fully assess damage at its 249,000 b/d Lakes Charles refinery as access was restricted because of a nearby chemical fire. </p><p>The Calcasieu Waterway, which connects the port of Lake Charles with the Gulf of Mexico, <a href="https://direct.argusmedia.com/newsandanalysis/article/2137576">reopened</a> yesterday with a number of restrictions because of debris and downed power lines.</p><p>Although refiners in Texas were not as affected, market participants said that a loss of power at Total's 240,000 b/d Port Arthur refinery refinery and the Rainbow Terminal where the refinery loads coke had led to <i>force majeures</i> on coke cargoes. The terminal estimated power may be out for two weeks. Total said on 27 August that it had <a href="https://direct.argusmedia.com/newsandanalysis/article/2136381">begun restarting</a> the facility. </p><p>Most of the about 1.5mn b/d of east Texas refining capacity that braced for the storm is also now in the process of restarting, including Motiva's <a href="https://direct.argusmedia.com/newsandanalysis/article/2137115">600,000 b/d refinery</a> in Port Arthur, Texas; Valero's <a href="https://direct.argusmedia.com/newsandanalysis/article/2136689">325,000 b/d refinery</a> in Port Arthur; and ExxonMobil's <a href="https://direct.argusmedia.com/newsandanalysis/article/2136662">362,000 b/d refinery</a> in Beaumont, Texas. But some of these restarts may still take two weeks, according to participants.</p><p>None of the estimates of lost coke production are <a href="https://direct.argusmedia.com/newsandanalysis/article/2136078">anywhere near the amount lost to Harvey</a> in 2017. And some of the Lake Charles coke production goes to specialty markets like steel recarb, which could help to mitigate the effect on fuel-grade 6.5pc sulphur coke prices. </p><p>But the coke market was <a href="https://direct.argusmedia.com/newsandanalysis/article/2131913">already undersupplied</a>, which could mean even small reductions in supply could affect prices as some buyers are short.</p><p>Refiners may be able to make up some of the lost production at other facilities that were running at lower levels, if the outages create additional demand for transport fuels. "The bottleneck is the demand for liquid", one coke buyer said. Regional gasoline prices did <a href="https://direct.argusmedia.com/newsandanalysis/article/2136759">surge last week</a> to the highest in more than five months in anticipation of potential damages to the Gulf coast refining complex. But prices ultimately retreated to levels seen at the end of the previous week as Hurricane Laura largely spared refining infrastructure. </p><p>It was also unclear what the storm's effects will be on the Lake Charles calcining hub. Calciners Rain and Alcoa, both with facilities in Lake Charles, were <a href="https://direct.argusmedia.com/newsandanalysis/article/2136910">not able to provide updates</a> as of late last week, with debris-strewn roads preventing crews from returning. The companies did not respond to requests for comment today. Even if the plants sustained minimal damage, it could be difficult to fully staff the facilities with power in the region possibly out for an extended period. </p><p>Lake Charles exported about 45,000t of calcined coke in June and about 400,000t in full year 2019, according to the Census Bureau. </p><p class="bylines">By Lauren Masterson</p></article>