Texas refiners evaluate plants, eye restart: Update 2

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Texas refineries shut for a power and gas supply crisis this week have begun evaluating restart plans for the coming days or weeks.

Severe winter weather and the electricity and natural gas curtailments it wrought abruptly reduced rates at more than 5.1mn b/d of Texas refining — nearly 28pc of US operable refining capacity. At least 3mn b/d fully shut. Reductions stretched from within 30 miles (48km) of the Louisiana border to the state's western edge in El Paso — nearly 900 miles apart — and affected refiners supplying every US energy center and global transportation markets.

Unlike the hurricanes that regularly spin across the Texas coast, utilities say this week's winter storm left essential transmission infrastructure unscathed. Heavy damage to western Louisiana's power grid last fall shut refineries there for months to wait for stable power supplies.

None of the many Texas refineries abruptly cut from power on early 15 February have reported the fires, explosions or other major damage such unplanned outages can cause.

"I do not know what the odds of that were, but regardless, it was very lucky," said John Auers, executive vice president at Turner, Mason & Company.

Restart schedules may instead hinge on economics. Natural gas curtailments prioritizing home heating and power generation remain in effect, raising prices and slashing access for large industrial customers. As prices fall and supplies return, crude processing capacity will return, Auers said.

"We will know a lot more after this weekend," he said. "I would expect some facilities will be on line after this week or early next week."

Power costs have already eased as the Electric Reliability Council of Texas (ERCOT), which operates the power grid covering most of Texas, ends emergency curtailments.

Power generation remains limited, the operator said today, but temperatures are warming.

"Now that we are into more normal operations, the workings of the market will determine when people decide to use power and what they are willing to pay to be on the system, and we do not have as many concerns about large demand coming back into the system," ERCOT chief executive Bill Magness said today. "Those will be arrangements between power companies and customers, whether petrochemical or other large industrial facilities."

The grid operator was working with large industrial companies to return facilities to service as they were ready, senior director of operations Dan Woodfin said.

"We have been talking to transmission operators and they are working with industrial facilities and developing plans," Woodfin said. "Some have already come back, others will be longer out into the future, but all trying to work with those facilities to bring them back on line when they want."

Waiting in the wings

More than 3.3mn b/d of Texas refining capacity operates on the ERCOT grid. Another 1.7mn b/d of refining capacity, including the Beaumont area on the Texas coast, operates in portions of Texas connected to /multi-state power grids.

The winter storm and subsequent squeeze on gas and power supplies affected nearly every Texas refinery — roughly 5mn b/d of capacity — beginning 14 February.

Saudi Aramco-owned Motiva was evaluating equipment today to prepare for restart at its 603,000 b/d refinery in Port Arthur, Texas. The company had no specific timing for when it could return units to service. Shell also had no timetable for restarting its 340,000 b/d joint venture refinery in Deer Park.

ExxonMobil continued operating Baytown and Beaumont power generation equipment to supply the grid but kept about 923,000 b/d of refining capacity at those sites off line. LyondellBasell's 268,000 b/d refinery in Houston remained down as workers assessed equipment.

Other refineries operating outside of the ERCOT grid would still face natural gas curtailments and other practical disruptions. Marathon Petroleum's 122,000 b/d El Paso refinery reported unit malfunctions from freezing weather on 14 February. The refinery is heavily supplied from the Permian region that shut in production as the severe cold pushed through the state. Marathon Petroleum has not commented on operations. Valero and Phillips 66 reported flaring and malfunctions from refineries in the Texas Panhandle on the Southwest Power Pool electric grid. Those refineries would have been better prepared for very cold storms, but neither operator has commented on operations.

Other refiners already shut could move up major planned maintenance that they would start anyway in the near future, Auers said. Marathon Petroleum plans major maintenance at its 585,000 b/d Galveston Bay refinery in Texas City on the coast and in the ERCOT operating region. The company has declined to comment on its plans or operations.

By Elliott Blackburn