Motiva assesses Port Arthur refinery for restart; other plants could face delay

New York — Motiva said Feb. 19 it was assessing the impacts to its 607,000 b/d Port Arthur, Texas, refinery as it gets ready to restart the plant, while market sources said other plants could face delays of several weeks before start-up.

"Motiva is currently assessing the impacts of Winter Storm Uri after record low temperatures necessitated the shutdown of its Port Arthur Manufacturing Complex on Sunday, February 14," said the company in its Feb. 19 statement.

"Our operations team is now conducting a full assessment of process units and supporting systems in advance of preparations for re-streaming units," the statement read.

Winter Storm Uri brought Arctic cold temperatures to Texas, impacting refineries across the state while power grid problems forced the state to conserve power by shutting some plants.

Futures, cash prices move on outages

The refinery outages have been especially bullish for NYMEX RBOB futures, as the Atlantic Coast depends heavily on Gulf Coast refined products via the Colonial Pipeline.

The New York-delivered front-month RBOB contract was trading at around $1.835/gal at 1450 GMT Feb. 19, up 4.07 cents.

The ICE RBOB crack spread against Brent crude was trading around $16.41/b, up from $13.75/b on Feb. 12, prior to the refinery shutdowns.

On the cash market, Gulf Coast CBOB (A4) rose quickly Feb. 19 to reach 1.8 cents/gal over last close, at NYMEX April RBOB futures minus 9.5 cents/gal, according to Platts assessments. Unleaded finished regular (M4) was heard at futures minus 8 cents/gal, with the M4/A4 spread narrowing to 1.5 cents/gal, from 3.20 cents/gal the day before, according to trading sources.

Restart issues

Other plants may have problems in restarting their units after the extreme cold which gripped the region.

A source familiar with the region's refinery operations said that some plants could take "several weeks" until they return to normal.

"We are not set-up for hard freezes," he said.

Among the plants which could see delayed restarts are ExxonMobil's Beaumont and Baytown refineries, Total's Port Arthur plant and Marathon's Galveston Bay refinery, he said.

These four plants have a total refining capacity of 1.7 million b/d out of the state's 5.9 million b/d total and include two of the nation's largest plants – Marathon's 585,000 b/d Galveston Bay refinery and ExxonMobil's 560,500 b/d Baytown plant.

Market sources said these four plants experienced pipeline breaks and substation issues due to the cold weather, which would delay restarting the plants.

One market source said ExxonMobil's Beaumont plant was forced to make a cold shutdown, which often results in structural damage to piping.

Marathon would not comment on its operations.

Curtailments

Curtailments of natural gas and other gases to the plants is another problem refiners are facing as they seek to restart. Several of the state's largest natural gas fields are still dealing with frozen compressors, market sources said, adding that while they are expected to thaw as temperatures and begin to return to service later today, directives by Texas governor Abbot has prioritized home heating and power power over industrial use.

A spokeswoman from Total said the company is continuing with its equipment checks at the plant to be ready to restart when natural gas curtailments end.

"Like many industrial facilities across Texas, Total Port Arthur Refinery is facing natural gas curtailments in the wake of this week's historically bitter cold storm," said Tricia Fuller, a spokeswoman for the company.

Some market sources expect that local electricity and natural gas utility CenterPoint Energy may not let let all the refiners return at the same time, but rather enact staged restarts because it is a "huge draw on their grid". Expectations are for CenterPoint to reach full rain a minimum of 4 to 5 days.