Texas refinery power, gas access limited into next week

State-ordered curtailments will limit power and natural gas supplies to Texas refiners into next week as the electric grid struggles to heat homes and power critical infrastructure following this week's severe winter storm.

More than 2.1mn b/d of Texas refining capacity was confirmed shut down and at least 5mn b/d of capacity reduced in some way this week by storm conditions affecting refiners stretched from the Texas coastline to the far west desert border in El Paso. The affected Texas refiners represent nearly a quarter of US refining capacity, linked to every US energy region and exporters to markets across the globe. Cold weather conditions and natural gas curtailments have also affected refining operations in Oklahoma and Louisiana.

Texas refiners face a lack of power and natural gas essential to fuel production as state regulators divert available supplies to heat homes and power critical infrastructure such as hospitals. Regulators late yesterday extended natural gas curtailments for large industrial customers such as refiners to 23 February. And large industrial facilities that dropped offline to help narrow the gap between available power supply and soaring demand remain without power, the state grid operator, Electric Reliability Council of Texas (ERCOT), said today.

ExxonMobil and Shell directed their on-site power co-generation plants at Baytown, Beaumont and Deer Park to supply the power grid after shutting refining operations at the three plants totaling 1.3mn b/d of processing capacity.

Saudi Aramco-owned Motiva shut its 600,000 b/d Port Arthur refining complex — the single largest in the US — for "unprecedented freezing temperatures." Citgo's 157,500 b/d refinery in Corpus Christi, Texas, remained shut as the facility awaited stable power and natural gas supplies.

Nearly every other refinery in the state reported adjusting operations for the state emergency declaration, for freezing units and for other storm conditions.

Recovery times uncertain

No refiner suggested any restart timing — only preparation to bring units back online when able. Refiners also generally refused to discuss current operations, even as the limitations blanket industry across Texas.

The statewide nature of the event eclipses even Hurricane Harvey for the size of refining disruption in Texas. That 2017 storm affected about 4.8mn b/d of coastal refining capacity, including roughly 1.5mn b/d of refining capacity inundated by water for weeks.

Refiners should not face a similar scale of physical plant damage after this storm, but restoration efforts remain uncertain. Rotating outages to residential customers could continue into the weekend as 40,000 MW of power generation — nearly half of the grid's 86,000 MW peak summer capacity — remains forced offline, ERCOT said today.

By Elliott Blackburn