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Houston refiners weather hurricane-force winds: Update

  • : Crude oil, Oil products
  • 24/05/17

Adds Calcasieu comment, update on flaring reporting

Over 2mn b/d of US refining capacity faced destructive winds Thursday evening as a major storm blew through Houston, Texas, but the damage reported so far has been minimal.

Wind speeds of up to 78 mph were recorded in northeast Houston and the Houston Ship Channel — home to five refineries with a combined 1.5mn b/d of capacity — faced winds up to 74 mph, according to the National Weather Service.

Further South in Galveston Bay, where Valero and Marathon Petroleum refineries total 818,000 b/d of capacity, max wind speeds of 51 mph were recorded.

Chevron's 112,000 b/d Pasadena refinery on the Ship Channel just east of downtown Houston sustained minor damage during the storm and continues to supply customers, the company said.

ExxonMobil's 564,000 b/d Baytown refinery on the Ship Channel and 369,000 b/d Beaumont, Texas, refinery further east faced no significant impact from the storm and the company continues to supply customers, a spokesperson told Argus.

Neither Phillips 66's 265,000 b/d Sweeny refinery southwest of Houston nor its 264,000 b/d Lake Charles refinery 140 miles east in Louisiana were affected by the storm, a spokesperson said.

There was no damage at Motiva's 626,000 b/d Port Arthur, Texas, refinery according to the company.

Calcasieu's 136,000 b/d refinery in Lake Charles, Louisiana, was unaffected by the storm and operations are normal, the refiner said.

Marathon Petroleum declined to comment on operations at its 593,000 b/d Galveston Bay refinery.

Valero, LyondellBasell, Pemex, Total and Citgo did not immediately respond to requests for comment on operations at their refineries in the Houston area, Port Arthur and Lake Charles.

A roughly eight-mile portion of the Houston Ship Channel from the Sidney Sherman Bridge to Greens Bayou closed from 9pm ET 16 May to 1am ET today when two ships brokeaway from their moorings, and officials looked in a potential fuel oil spill, according to the US Coast Guard.

The portion that closed provides access to Valero's 215,000 b/d Houston refinery, LyondellBasell's 264,000 b/d Houston refinery and Chevron's Pasadena refinery.

Emissions filings with the Texas Commission on Environmental Quality (TCEQ) are yet to indicate the extent of any flaring and disruption to operations in the Houston area Thursday evening, but will likely be reported later Friday and over the weekend.

Gulf coast refiners ran their plants at average utilization rates of 93pc in the week ended 10 May, according to the Energy Information Administration (EIA), up by two percentage points from the prior week as the industry heads into the late-May Memorial Day weekend and beginning of peak summer driving season. The next EIA data release on 22 May will likely reveal any dip in Gulf coast refinery throughputs resulting from the storm.

Houston area refineries

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25/05/21

Phillips 66 shareholders split board vote

Phillips 66 shareholders split board vote

Houston, 21 May (Argus) — Activist hedge fund Elliott Investment Management is set to win two seats on Phillips 66's board of directors, short of its goal of four seats, according to preliminary results. Two Phillips 66 nominees were also elected in the vote, a positive result for the US refiner and midstream operator. Elliott, which has amassed a $2.5bn stake in Phillips 66, had put forth four nominees for the board in a proxy fight which culminated today at an annual meeting of shareholders. Both sides declared victory after the split vote on the four open seats. Phillips 66 said the vote reflects a belief in its integrated strategy of holding assets in different sectors, while Elliott said the vote "sends a clear message" that shareholders demand meaningful change at Phillips 66. The two Elliott nominees elected to the 14-member Phillips 66 board are Sigmund Cornelius, former chief financial officer of ConocoPhillips and Michael Heim, former chief operating officer of Targa Resources, according to preliminary voting results. The two Phillips 66 nominees elected to the board are Nigel Hearne, a 35-year veteran of Chevron, and Robert Pease, a former Motiva and Cenovus downstream executive who was appointed to the board in 2024 to address Elliott's concerns about a shift in focus from refining to midstream. Phillips 66 also said today that shareholders "overwhelmingly" rejected an Elliott proposal requiring annual director resignations, according to the preliminary results. The voting tally will be tabulated and certified by an independent inspector and final results will be reported to the US Securities and Exchange Commission. The two Elliott nominees for the Phillips 66 board who were not elected are Brian Coffman, former chief executive at Motiva, and Stacy Nieuwoudt, former energy analyst at Citadel. The two Phillips 66 nominees to the board that were not elected are current director John Lowe, who was up for re-election, and Howard Ungerleider, a former Dow president and chief financial officer. Long-running battle over direction Elliott contends that Phillips 66 has consistently trailed its industry peers and needs to streamline operations, including spinning off or selling its midstream business, selling its 50pc stake in Chevron Phillips Chemical (CPChem), and possibly other assets. Elliott has waged an aggressive campaign, launching a website dubbed "Streamline 66" with power point presentations, podcasts, biographies of its dissident board nominees, press releases and information on how shareholders can vote. Phillips 66 has told shareholders that its board and management team are implementing a transformative strategy that has delivered results. The company has expanded its NGL business, improved its refining cost structure and continues to position CPChem as the lowest cost producer of ethylene, Phillips 66 said. Phillips 66 told shareholders that Elliott was pushing "an aggressive short-term agenda" that would cause disruption, slow momentum and jeopardize shareholders' investment capital. Phillips 66 has made some adjustments since Elliot started to agitate for change. In addition to adding Pease to the board, the company recently agreed to sell off some of its European retail business , and expects about $1.6bn in pre-tax cash proceeds from the sale that it will use toward debt reduction and shareholder returns. But the refiner has resisted the other major Elliott recommendations to divest its midstream business and sell its 50pc share of CPChem, saying earlier this month that the Phillips board has evaluated them and "came to the conclusion that neither action is in the best interest of long-term shareholders at this time". Meanwhile, Chevron has advised Phillips 66 of its interest in acquiring the other half of CPChem "at a reasonable value for both parties", Chevron chief executive Mike Wirth said on 2 May. Three top shareholder advisory firms [backed the Elliott nominees] (https://direct.argusmedia.com/newsandanalysis/article/2687988) in the proxy fight. Institutional Shareholder Services (ISS) and Egan-Jones recommending all four of Elliot's dissident nominees, while Glass Lewis backed three of the four. By Eunice Bridges Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Nigeria's Dangote to import 9mn bl WTI crude in June


25/05/21
25/05/21

Nigeria's Dangote to import 9mn bl WTI crude in June

London, 21 May (Argus) — Nigeria's 650,000 b/d Dangote refinery has bought 9mn bl of US light sweet WTI for delivery in June, according to traders, the most for any month since it started up in early 2024. Trading firm Vitol sold three 2mn bl shipments, and trading firm Petraco sold one 2mn bl cargo and a Suezmax-sized shipment. Only one 2mn bl cargo of WTI has arrived at Dangote in May to date, after three in April, according to Vortexa. Dangote was built to run Nigerian crude, but its share of local grades has been 50pc or less in recent months. Nigeria's state-run NNPC allocated six June-loading cargoes to Dangote — two of medium sweet Escravos, and one each of light sweet grades Brass River, Bonny Light, Okwuibome and Yoho — for a maximum of 6mn bl. Market participants expect NNPC to slightly increase its official crude formula prices for June supplies, which should surface before the end of May. Even small increases to official prices would erode the appeal of Nigerian grades compared with WTI. WTI for front-month delivery averaged a 90¢/bl premium to North Sea Dated on a delivered-Europe basis in the 1-20 May period. The deals to Dangote were struck at similar levels on a delivered-Nigeria basis, although price levels were unconfirmed. Escravos' official price was a $1.63/bl premium to Dated for May, and Bonny Light was 48¢/bl above the benchmark on a fob basis — already close or higher than delivered WTI prices, without freight. Dangote has provided an outlet for US light sweet crude at a time of subdued demand from Europe. Around 1.5mn b/d of WTI is booked to arrive to Europe in June, which is lower than typical amounts, according to traders. Tracking data do not always capture the amount of WTI accurately. Relatively cheap Caspian CPC Blend has been weighing on European demand for WTI, according to traders. The Caspian light sour grade has been on average $3.20/bl cheaper on a cif Augusta basis than WTI on a cif Rotterdam basis in May to date. Taking CPC Blend to northwest Europe would incur some additional freight costs, and narrow its discount relative to WTI, but the grade would be still priced below the US crude. Europe is grappling with a glut of light crude grades, partly because of far higher Kazakhstan production an muted Asia-Pacific demand for it, as well as lower demand in Europe due to permanent closures of some refineries. By Lina Bulyk and Sanjana Shivdas Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

India's air passenger traffic rises on year in April


25/05/21
25/05/21

India's air passenger traffic rises on year in April

Mumbai, 21 May (Argus) — India's domestic air passenger traffic rose by 8pc on the year but fell by 1pc on the month to 14.3mn in April, data from the Civil Aviation Ministry show. Domestic air passenger traffic rose by nearly 10pc on the year to 57.5mn during January-April. Domestic air travel serves as an indicator of jet fuel demand. Jet fuel demand in April rose by 4pc on the year to 202,000 b/d, oil ministry data show. Indian state-controlled refiners cut jet fuel prices by 6pc from a month earlier in April. Prices in capital New Delhi, Kolkata, Mumbai and Chennai dropped to 89,441.18 rupees/kilolitre ($1,044/kl), Rs91,921.00/kl, Rs83,575.42/kl and Rs92,503.80/kl respectively. Fuel costs typically account for 30-40pc of airlines' expenses. Military confrontations between India and Pakistan in May disrupted flights from and within India. Almost 32 airports in parts of northern and western India were briefly closed because of security concerns and border threats. By Roshni Devi Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US gas market expected to tighten in 2026


25/05/20
25/05/20

US gas market expected to tighten in 2026

New York, 20 May (Argus) — US natural gas producers and analysts are forecasting a tighter market in 2026 than previously expected because of rising LNG exports, a slowdown in crude production and a reluctance on the part of gas-focused producers to ramp up supply. The market has already tightened this year as cold winter weather balanced the previously oversupplied domestic market and Venture Global's Plaquemines LNG terminal ramped up faster than expected. Nymex gas delivery for 2026 at the US benchmark Henry Hub settled Tuesday at $4.30/mmBtu, up from $3.91/mmBtu at the start of the year. US LNG exports are expected to rise by 19pc to 14.2 Bcf/d this year, followed by a 15pc increase to 16.4 Bcf/d in 2026, the US Energy Information Administration forecasts. Meanwhile, tariff-induced economic uncertainty and plans by Opec+ to boost supply have lowered crude prices this year, which will probably throttle growth in the Permian basin, a prolific US oil field in west Texas and southeast New Mexico that accounted for 22pc of US gas supply in 2024. US onshore crude production has likely peaked as activity slows in response to the recent decline in oil prices, Diamondback Energy chief executive officer Travis Stice said earlier this month. US producer Antero Resources this week forecast a 5.5 Bcf/d supply growth shortfall from 2025-26 as producers fail to keep up with booming LNG exports, pipeline sales to Mexico and rising gas-fired power demand. Producers have so far been reluctant to ramp up activity in the Haynesville shale basin of east Texas and northwest Louisiana, the major marginal gas supplier to the US market and a key supplier to the coming wave of new US LNG export terminals, all of which are sited in Texas and Louisiana. Producers' hesitation might be linked to past experience, when they ramped up output for new LNG terminals only for those terminals' in-service dates to get pushed back, contributing to an oversupplied market that depressed prices. Haynesville operators' lack of response to higher gas prices in the first quarter of this year led analyst group Enverus to raise its 2026-30 US gas price forecast to $4/mmBtu. Some producers, including EQT, the second-largest US gas producer by volume, are holding off on locking in the elevated prices for 2026 production with financial derivatives, in part because they want exposure to the possibility of even higher prices. Those producers are "playing a little bit of a dangerous game", according to FactSet senior energy analyst Connor McLean. If a mild summer or delayed LNG terminal start-ups reverse expectations of a tighter market, producers might enter a weaker market in 2026 having "missed their chance" at more opportunistic hedges, McLean said. US LNG out the window Tudor Pickering Holt last week raised its "2026 base case forecast" for US gas prices from $4/mmBtu to $5/mmBtu. The Houston-based investment bank expects the US gas market to shift to a state of "material undersupply" in 2026, potentially pushing domestic prices so high that the price of producing LNG from US gas would exceed prevailing global LNG prices. Aside from short-term price spikes caused by storms or maintenance events, this would be the first instance of the US gas-to-global LNG price "arbitrage window" closing since pandemic-induced demand destruction caused more than 175 US LNG cargoes to be cancelled from April-November 2020, according to consultancy McKinsey. Energy Aspects head of North American gas David Seduski said he would not rule out the possibility of high US gas prices reducing exports, but that is not his "base case". According to Seduski, Europe is "in such desperate need of gas" that in the absence of some geopolitical development that boosts Russian gas sales to Europe, high US gas prices would probably just spur higher European gas prices and keep US sales to the continent profitable. Henry Hub prices would probably have to exceed $7/mmBtu given current global gas prices for US LNG cargoes to start being cancelled, FactSet's McLean said. By Julian Hast Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Shell CEO defends 'resilient investment strategy'


25/05/20
25/05/20

Shell CEO defends 'resilient investment strategy'

London, 20 May (Argus) — Shell chief executive Wael Sawan defended the company's "resilient investment strategy" at its annual shareholder meeting today, as directors faced a barrage of questions from climate-focused investors. A resolution calling for more details on Shell's LNG strategy gained over 20pc support, a level consistent with climate-related votes in previous years . But absent this year were the disruptive climate protests that have marked past meetings. This was partly due to Shell's choice of venue, London's Heathrow Airport, which has a five-year High Court injunction banning environmental protests on site. Still, climate-conscious shareholders dominated the discussion. One questioned how Shell could justify expanding oil and gas operations when the IEA's net zero emissions by 2050 scenario suggests no new oil and gas projects are needed. Shell's chairman Andrew Mackenzie responded that the IEA's scenario is just one of many and includes conditional commitments made by governments that may not materialise. "We see a phase of continuing growth, particularly in the use of gas and especially in LNG, that we think is appropriate to invest in," he said. Sawan pointed out that most of the net present value from Shell's oil and gas projects will be realised before 2040, "and so this is a very resilient investment strategy that we are offering our shareholders". He also highlighted that Shell has $20bn of capital invested in low-carbon alternatives such as biofuels, hydrogen and electric vehicle charging. "It is in our interest... to see that market grow," he said. A key focus was Resolution 22, filed by the Australasian Centre for Corporate Responsibility (ACCR), which called on Shell to explain how its LNG strategy aligns with its climate goals. "We believe that shareholders still don't have the information that they need to properly assess the risks associated with this strategy," said the ACCR's Sarah Brewin. The scale of Shell's uncontracted LNG out to 2050 exposes the company and its shareholders to "significant risk should prices fall and demand soften", she said. The company's LNG outlook "is highly optimistic and increasingly out of step with global trends", she added. Shell's board opposed the resolution, arguing that its strategy is based on a range of scenarios — including one exploring the impact of AI on energy demand. Its 2025 LNG Outlook, based on Wood Mackenzie data, forecasts a 60pc rise in global LNG demand by 2040, driven by economic growth in Asia and decarbonisation in heavy industry and transport. While the resolution did not pass, Shell said it will prepare a note within six months detailing its LNG market outlook, its LNG business strategy and how these align with its climate commitments. By Jon Mainwaring Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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