Beryl Cuts Power to Galveston Refinery; Parts of the Explorer Pipeline Shut — OPIS Update

Marathon Petroleum's 665,000 b/d Galveston Bay, Texas, refinery briefly lost power Monday morning and at least one other refinery has cut output as Hurricane Beryl brought heavy rains and more than 90 mph wind gusts to the state after an early morning landfall.

The severe weather and power disruptions also led the Explorer Pipeline to close parts of its system.

A Marathon spokesman at midday said flaring at the Galveston facility was underway after it briefly lost power during the storm.

"The safety and health of our personnel and the community are our top priority as we work to resolve the situation," the spokesman said, without providing information on the status of the operations.

PowerOutage reported that more than 2.76 million customers in Texas were without electricity as of 4:30 p.m. ET, with some of the highest numbers reported around the Galveston area. The website did not include more than 2.18 million customer outages from CenterPoint Energy, the utility provider for Harris County, which includes Houston.

Oil analysts on Monday said Beryl is unlikely to cause significant interruptions in fuel supply. But heavy rains and flooding in Houston and other heavily populated areas in the state could crimp fuel demand as travel is difficult and many rushed to fill their tanks ahead of the storm.

Beryl made landfall near Matagorda, Texas, roughly halfway between Corpus Christi and Houston -- as a Category 1 hurricane with maximum sustained winds of 80 mph, according to the National Hurricane Center.

NHC said earlier Monday it expected Beryl, which has weakened to a tropical storm, to inflict "damaging wind gusts" as it continues to move north.

Beryl is also expected to continue to bring "life-threatening storm surges" to parts of the Texas coast, including Galveston Bay, that could bring flash floods into Monday night across portions of the middle and upper Texas Gulf

Coast and eastern Texas, NHC said. NYMEX West Texas Intermediate crude oil, gasoline and diesel futures settled lower as traders assessed Beryl's impact and optimism over a possible ceasefire in Israel's war with Hamas.

A Citgo spokesman said Monday afternoon the company is in the process of returning its 175,000 b/d Corpus Christi refinery to normal operations. Citgo said Sunday it reduced rates at its refinery ahead of Beryl's landfall.

In addition to the Citgo plant, Corpus Christi is the home of two other large refineries - Flint Hill's 350,000 b/d facility and Valero Energy's 301,000 b/d plants. OPIS could not reach representatives of Flint Hills and Valero for comment by the time of publication.

Delek's 77,500 b/d Tyler, Texas refinery on Sunday reported an upset condition and "flow meter malfunction" during a rainstorm, according to a company filing with the Texas Commission on Environmental Quality. Delek said the "excess opacity" event -- which refers to the emission of air contaminants above the regulatory limit - lasted about six minutes.

A Phillips 66 spokesman told OPIS Monday afternoon its 273,000 b/d Lake Charles, La., and 286,000 b/d Sweeny, Texas, refinery are continuing to operate.

An ExxonMobil spokeswoman on Monday afternoon said operations at the company's 634,400 b/d Beaumont refinery near Houston were normal and those at 588,000 b/d Baytown refinery were stable. On Saturday, the company said it began its hurricane preparedness process on Friday for its chemical and refinery complexes at Beaumont and Baytown in Texas along with another large facility in Baton Rouge, La. The company also operates a chemical complex joint venture with Sabic in Corpus Christi.

Valero on Saturday had a power "interruption" at its 424,000 b/d Port Arthur, Texas, refinery that led to "temporary process unit upsets," the company said in a TCEQ filing.

Explorer Pipeline said in a Monday shipping bulletin that it had shut parts of its system in Texas because of the severe weather and storm-related power disruptions, according to a market source. The company, which provides a key link between Gulf Coast refineries and Midwest refined product markets, said it expects to have more information about when it can restart operations later Monday.

In addition, the port of Corpus Christi, one of the largest U.S. crude oil and natural gas export hubs, halted operations and vessel traffic over the weekend ahead of the storm. The ports of Houston, Galveston, Freeport and Texas City also were closed on Sunday afternoon. Most ports are expected to resume operations once the storm passes.

ExxonMobil, Shell and Chevron said they evacuated personnel and shut in several offshore oil platforms on the Gulf of Mexico late last week, while those outside of Beryl's path continued to operate.

The NHC on Monday afternoon said Beryl is expected to turn toward the northeast with an increase in forward speed through Tuesday. On its current forecast track, the center of Beryl will move over eastern Texas Monday, then through the Lower Mississippi Valley into the Ohio Valley on Tuesday and Wednesday, it said.

Most weather forecasters expect Beryl to weaken quickly as it continues to move inland. Beryl last week had strengthened to a Category 5 hurricane before it cut a destructive path across the Caribbean and Yucatan Peninsula.

This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.

--Reporting by Frank Tang, ftang@opisnet.com, Cory Wilchek, cwilchek@opisnet.com and Andrew Atwal, aatwal@opisnet.com; Editing by Jeff Barber, jbarber@opisnet.com

(END) Dow Jones Newswires

July 08, 2024 17:37 ET (21:37 GMT)

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