Roughly 13pc of US crude processing capacity cut rates or shut facilities as the remnants of a category 4 hurricane submerged the Texas coast in record flooding.
Hurricane Harvey brought lashing winds and floodwaters to a region operating a quarter of US refining capacity and supplying markets far beyond state borders. At least 2.2mn b/d of crude processing cut or shut equipment while logistics infrastructure supplying crude and fuel across the eastern US and to markets overseas halted.
ExxonMobil shut its 557,000 b/d Baytown refinery, the third-largest on the Texas coast, and a source familiar with operations said Marathon Petroleum reduced its 585,000 b/d Galveston Bay refinery in Texas City, the second-largest refiner in the state, to minimal rates. Shell shut its 247,000 b/d joint venture refinery with state-owned Mexican oil company Pemex in Deer Park, Phillips 66 its 247,000 b/d Sweeny refinery and Petrobras subsidiary Pasadena Refining shut its 100,000 b/d Pasadena refinery as floodwaters rose. LyondellBasell cut rates at its 268,000 b/d Houston refinery after port closures starved units of feedstocks, but said the facility had no damage. Other refiners continued to evaluate their operations and crude supplies.
The reductions have strained fuel supplies into central Texas. Refiners and midstream operators must keep storage tanks full or risk their floating away. Companies use crude or products, rather than water, to keep the tanks filled and avoid quality problems. The US Environmental Protection Agency yesterday approved waivers relaxing emissions requirements for distillate and allowing winter-grade gasoline, which has an easier specification to meet.
Phillips 66 shut its Pasadena refined products terminal tank farm today because of flooding that damaged at least one tank. Colonial Pipeline today said it continued to operate the earliest origin points on its 5,500-mile (8,851km) refined products pipeline system moving products through the US Gulf coast to the Atlantic coast. The company was meeting with its local staff to continue assessing conditions, a spokeswoman said.
Further south, Valero's 200,000 b/d Corpus Christi refinery and 95,000 b/d Three Rivers refinery did not sustain "substantial refinery impacts," the company said. Representatives did not comment on the status of Citgo's 165,000 b/d and Flint Hills Resources' 200,000 b/d Corpus Christi refineries.
All four were shut as Harvey roared ashore as a hurricane with wind speeds of at least 130 mph (209 km/h) and an expected storm surge of 12 feet.
