SPR site in Louisiana significantly damaged

A US Strategic Petroleum Reserve (SPR) facility at West Hackberry, Louisiana, was significantly damaged by Hurricane Laura late last month, US energy secretary Dan Brouillette said today.

"We will repair the site as aggressively as we can," Brouillette said, adding that the US strategic stockpile overall is functional. "If we had to execute a drawdown at the direction of the president, we can do it easily," he said.

Laura made landfall near the facility on 27 August, buffeting the installation with its most severe winds. Brouillette said he will lead an in-person assessment of the site later today.

The West Hackberry site as of 30 June held 194.8mn bl — 30pc of the then total SPR inventory. The three other SPR locations, including one in Louisiana and two in Texas, are operating normally.

Damage from the hurricane continues to take a toll on southwest Louisiana's energy infrastructure more than two weeks after landfall. Much of the Lake Charles area, including three refineries, saw devastating wind damage and remains without power even today. Local utility Entergy Louisiana said today it began to restore power to the first of its repaired transmission lines into Lake Charles. But almost 92,000 customers in the southwest part of the state are still without power — down from a peak of 279,000 in late August.

Citgo's 425,000 b/d Lake Charles refinery took the most damage, with the refiner saying last week it needs 4-6 weeks of repair. A nearby chemical plant fire forced Phillips 66 to wait for days to assess its 249,000 b/d Lake Charles refinery. Calcasieu Refining idled its 136,000 b/d refinery at the beginning of August.

Two of the refineries did not sustain "catastrophic damage," Louisiana governor John Bel Edwards said, without specifying which two. The refineries have localized power sources to conduct damage assessment and prepare the facilities for a restart, he said. "They do not have the power to start production," he said. "Those are issues they will be working on for a long time."

A key problem constraining a quick restart of the refineries and other industrial facilities in the Lake Charles area is the widespread damage to housing and infrastructure, making it difficult to find workers in the region, Edwards said.

None of the refineries sustained damage that will permanently affect operations, Brouillette said at the joint briefing with Edwards. "We would expect many of them to come on line as soon as we restore power to the area," Brouillette said.

A demand slump earlier this year, as a result of economic disruptions from the Covid-19 pandemic, was a "mixed blessing" in limiting negative effects on energy markets from Laura, Brouillette said. "Happy to report that there are no shortages of refined products that are being reported in Louisiana and the southern US," he said. "That all will allow the refineries a little extra time to come on line and assess damages."

Edwards made a plea for federal assistance to help rebuild southwest Louisiana's power grid. Entergy called the damage to the grid "catastrophic" as the hurricane permanently damaged nine transmission lines and surrounding power infrastructure.

By Haik Gugarats