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Oil companies in Texas restoring operations following storm Beryl
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Oil companies in Texas restoring operations following storm Beryl
Jul 9, 2024 9:28 AM

By Arathy Somasekhar, Erwin Seba and Marianna Parraga

HOUSTON, July 9 (Reuters) - Oil and gas companies in

Texas were restarting operations on Tuesday after Hurricane

Beryl lashed the state with 80-mph winds, even as some

facilities sustained damages and power had not been fully

restored.

Beryl made landfall early on Monday near the coastal town of

Matagorda. Energy firms shut operations ahead of its arrival and

Texas' largest ports and navigation channels closed. However,

its impact on oil and gas production is expected to be minor.

On Tuesday, some ports had reopened, and most producers and

facilities were ramping up output after preventively cutting

down processing. Some were limited by the slow restoration of

power to homes, businesses and industrial customers.

About 2.28 million customers remained without power in

Texas and 30,000 more in Louisiana and Arkansas early on

Tuesday, according to PowerOutage.us, including some 1.78

million served by provider CenterPoint Energy ( CNP ).

The figure was more than double the number of customers that

lost power in May when a weather event bringing strong winds hit

Houston. It took more than a week for those outages to be

resolved in some city neighborhoods.

CenterPoint said on Monday that it expects to have 1 million

impacted customers restored by the end of Wednesday.

Houston was expected to be sunny with temperatures in the

high 90 degrees Fahrenheit (32.2°C), causing worries as power

outages knocked out air conditioning. The Heat Index in

southeast Texas could reach as high as 106 degrees Fahrenheit,

according to the National Weather Service.

Beryl lost strength quickly upon making landfall and by

Tuesday morning had been downgraded to a post-tropical cyclone,

the U.S. National Hurricane Center said. It warned that flash

flooding and a risk of tornados remained possible from

mid-Mississippi to Lower Ohio Valley on Tuesday.

TEXAS FLOODING EASING

Texas is the largest U.S. oil and gas producing state,

accounting for some 40% of oil and 20% of gas output, and is

also a major shipping and refining hub. Any weather-related

interruption could have an impact on crude and fuel production

levels, as well as imports and exports.

"Although the hurricane did not cause severe disruptions in

U.S. oil production and refining so far, several oil ports

remain closed while vast power outages can weigh on oil demand,"

Goldman Sachs said in a note.

Flooding in city regions was easing as water receded quickly

after Beryl's severe rainfall, which surpassed 11 inches in some

areas south of Houston.

Most refineries in Houston and Texas City are designed to

maintain operations even amid heavy rainfall, but some of those

facilities, ports and other energy infrastructure can develop

problems from sustained power interruptions, experts said.

Marathon Petroleum Corp ( MPC ) was preparing on Monday to

restart multiple units at its 631,000-bpd Galveston Bay oil

refinery in Texas City, sources said. The plant was awaiting

power to restart operations, the company said in a state

regulatory filing.

Phillips 66's 265,000-bpd Sweeny refinery in Texas

returned plants to normal operations after an upset early on

Monday caused by Beryl.

Citgo Petroleum temporarily reduced production over the

weekend at its 165,000-bpd Corpus Christi plant.

Ports from Point Comfort through Houston, including

Freeport, Galveston, and Texas City, saw damage in various forms

along with substantial operational delays, a shipping agency

wrote in a note to clients.

The Port of Corpus Christi reopened ship navigation on

Monday and the port of Freeport reopened on Tuesday. But the

Port of Houston said its terminals would remain closed on

Tuesday after conducting a preliminary assessment of facilities

and systems.

While some ships may begin moving into the port of

Houston on Tuesday afternoon, deep draft ship movements would

not likely begin until Wednesday after the safe reopening of its

various channels, the shipping agency wrote.

Formosa Plastics said on Monday it had temporarily shut

down operations at its Point Comfort plant site.

Shell, Chevron ( CVX ) and BP started

redeploying personnel evacuated from their Gulf of Mexico

platforms.

Freeport LNG, the third largest liquefied natural gas

facility in the U.S., has not provided an operational update

since it said it ramped-down production on Sunday.

Enterprise Products Partners ( EPD ) said a unit tripped due

to the weather at its natural gas liquids (NGL) processing

facility in Mont Belvieu, in east Texas, according to a filing.

Energy Transfer ( ET ) also faced issues at Mont Belvieu,

according to filings. Mont Belvieu is an NGL processing and

storage hub as well as the pricing point for North American NGL

markets.

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