Factbox: US Gulf Coast energy industry braces for Hurricane Laura

New York — The US Gulf Coast energy industry was preparing Aug. 26 as Hurricane Laura was approaching the Texas/Louisiana coast

Several Texas and Louisiana refiners, totaling roughly 2.34 million b/d of capacity, said they were in the process of closing plants or reducing runs ahead of Hurricane Laura, which is expected to make landfall early Aug. 27.

Offshore producers have shut about 1.559 million b/d of oil as of Aug. 26, or 84.3% of offshore production, and 1.652 Bcf/d of natural gas, 60.94% of offshore production, according to the US Bureau of Safety and Environmental Enforcement.

"Given the latest shut-in numbers...peak impact on US Gulf supply has likely been reached, and supply could recover from Laura by the middle of next week, assuming platform inspections do not yield material damage," S&P Global Platts Analytics analysts said.

"In June, Tropical Storm Cristobal...shut in about a third of US Gulf crude supply at the peak and caused evacuations at 185 platforms. US Gulf crude production largely recovered within about five days after the peak impact," the analysts said.

In natural gas, Sempra Energy's Cameron LNG began temporarily shutting down the southwest Louisiana facility Aug. 26, a day after Cheniere Energy took similar action at its nearby Sabine Pass export facility, as Laura threatened damage to onshore infrastructure.

Gas deliveries to the six major US LNG export facilities plunged to over an 18-month low Aug. 26, Platts Analytics data showed.

"Overall gas demand destruction in the power sector and continued restrictions on LNG vessel loadings will likely swell to meet, and even exceed, production cuts as the storms' impact hit land, which could weaken Henry Hub later in the week," said Platts Analytics analyst Jack Winters.

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PRICES

OIL

**NYMEX refined products prices edged lower as the refinery outages were offset by high inventories.

**NYMEX September RBOB settled at $1.3606/gal Aug. 26, down 3.53 cents on the day, but up 7.65 cents from Aug. 21.

**NYMEX September ULSD settled at $1.2447/gal, down 1.54 cents on the day, but up 3.67 cents from Aug. 21.

**NYMEX October crude settled at $43.39/b, up just $1.05 over the past three trading days.

NATURAL GAS

**US Southeast natural gas prices decreased on Aug. 26 on lower LNG feedgas demand ahead of Laura.

**The cash price for Columbia Gas Transmission Onshore fell 12 cents on the day to $2.32/MMBtu, Intercontinental Exchange data showed.

**The cash price for Houston Ship Channel fell 21 cents on the day to $2.30/MMBtu, as demand was expected to be lower because the city of Galveston issued a mandatory evacuation on Aug. 25.

TRADE FLOWS

OIL

**The rise in US gasoline prices caused a sharp pull for available products out of Europe to the US, driving up an already tight freight market. The UK Continent to US Atlantic Coast clean freight rate was assessed at $23.61/mt Aug. 26, unchanged on the day, but up nearly $8 from Aug. 24.

**Market participants expected ballasters open in both the USAC and West Africa to make their way to UK Continent for prospective cargoes should the US Gulf remain out of commission. That led some market participants to believe strengthening sentiment will be short-lived.

NATURAL GAS

**US LNG production plunged to 18-month low of 2.77 Bcf/d and was expected to drop further after Sempra began to shut down Cameron LNG in southwest Louisiana Aug 26, a day after Cheniere took similar action at nearby Sabine Pass.

**No LNG tankers were loading at either facility, and no tankers appeared to be heading into the area by midday, Platts trade flow software, cFlow, showed Aug. 26. Sabine Pass has a capacity of 25.6 million mt/year, while Cameron LNG has a capacity of 15 million mt/year.

INFRASTRUCTURE

OIL

• The following Texas and Louisiana refiners, totaling roughly 2.34 million b/d of capacity, said they were closing plants ahead of Hurricane Laura:

• **Over 50% of US refining capacity is on the Gulf Coast, with PADD III refining capacity, including condensate splitters, totaling over 10 million b/d, according to Platts Analytics. Of that, 9.6 million b/d is in Texas, Louisiana and Mississippi.

  **Magellan Midstream Partners said it is closing its Galena Park crude oil and products terminal near Houston, but that its benchmark Magellan East Houston and Pasadena Texas terminals are remaining open for now.

  **Enterprise Products Partners was considering shuttering its massive Mont Belvieu oil and NGL hub, but is opting to keep it open for now.

  **Most majors and large public operators have announced shut-in oil and gas production ahead of the storms, including BP, Shell, Chevron, Norway's Equinor and Australia's BHP.

  **Offshore producers have shut about 1.559 million b/d of oil as of Aug. 26, or 84.3% of offshore production, and 1.652 Bcf/d of natural gas, 60.94% of offshore production, according to the US Bureau of Safety and Environmental Enforcement.

  **The Louisiana Offshore Oil Port has suspended operations at its Marine Terminal.

  **Houston area ports were closed Aug. 26, while New Orleans area ports were open with restrictions, according to the US Coast Guard.

  NATURAL GAS

  **Sempra Energy's Cameron LNG began temporarily shutting down the southwest Louisiana facility Aug. 26, a day after Cheniere Energy took similar action at its nearby Sabine Pass export facility.

  **A small group of essential staff would remain behind at Cameron LNG in case of an emergency, spokeswoman Anya McInnis said.

  **Pilot service was suspended to vessels through the channel serving Sabine Pass and through the channel serving Cameron LNG, according to advisories that shipping services issued to customers.

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