New York — Oil and gas companies on the Texas Gulf Coast were dealing Saturday with the impact of Hurricane Harvey, which made landfall near Corpus Christi, Texas, and was expected to produce torrential rains and flooding over the next few days.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
As of 1 PM CDT (1700 GMT), Harvey, now listed as a tropical storm, was about 45 miles west-northwest of Victoria, Texas, with maximum sustained winds of 70 mph, according to the US National Hurricane Center. The current path shows Harvey impacting primarily the Corpus Christi area, weakening to a tropical depression by Monday, and moving to the northwest of Houston.
Refiners shut nearly 900,000 b/d of capacity, primarily in the Corpus Christi area, while area ports and terminals were closed to vessel traffic.
Some offshore oil and gas operators evacuated platforms and rigs, while onshore operators were shutting in what may amount to hundreds of wells in the Eagle Ford Shale in South Texas.
* The NYMEX RBOB crack spread against WTI was strong on concerns the hurricane would tighten gasoline supplies. The October crack spread ended Friday at $16.69/b, up from $15.31/b Monday. While the NYMEX RBOB contract reflects gasoline delivered in New York, the Northeast regularly brings gasoline supplies from Gulf Coast refiners via Colonial Pipeline and barges.
* The US Environmental Protection Agency issued temporary waivers for parts of Texas required to use reformulated fuels under the Clear Air Act to ensure ample supplies of gasoline and diesel. The Texas Commission on Environmental Quality asked the EPA for waivers for gasoline and diesel in 30 of Texas' 254 counties. The waivers are in effect until September 15 but could be extended.
* With major Texas Gulf Coast ports of Corpus Christi and Houston closed to vessel traffic, imports and exports of crude and refined products will be delayed. But with Harvey now expected to weaken and largely stay clear of Houston, it is likely Houston area ports will be able to reopen sooner than Corpus Christi ports, and Houston area refineries will continue to operate.
* Texas imported roughly 1.9 million b/d of waterborne crude in May, out of a total 3 million b/d into the Gulf Coast, according to US Energy Information Administration data. Another 418,000 b/d of various refined products and unfinished oils were imported into Texas in May.
* Texas is also a major source of refined products to the Northeast via Colonial Pipeline, and waterborne refined products and crude exports. US Gulf Coast refiners exported 2.7 million b/d of refined products in May, primarily to buyers in Latin America and Europe. USGC refiners regularly export gasoline to Mexico, for instance, and diesel to Europe.
* The USGC exported 750,000 b/d of crude in May, according to the EIA. PIRA Energy Group, a unit of S&P Global Platts, estimates Texas' total crude export capacity to be 2.5 million b/d, of which 930,000 b/d is in Corpus Christi/Brownsville and 910,000 b/d is in Greater Houston.
* Roughly 900,000 b/d of Texas refining capacity has been shut, primarily in the Corpus Christi region. Houston area refineries were monitoring the storm, but the most recent forecast shows Harvey staying largely clear of those plants.
* Valero Energy shut its 293,000 b/d Corpus Christi plant and the 89,000 b/d Three Rivers, Texas, refinery. Valero's other Gulf Coast refineries -- in the Houston area -- were operating Saturday.
* Citgo shut its 157,500 b/d refinery in Corpus Christi. Citgo has a number of petrochemical production units at Corpus Christi, including aromatics facilities.
* Flint Hills Resources shut both the East and West plants of its 296,470 b/d Corpus Christi refining complex.
* Magellan suspended operations at its 50,000 b/d condensate splitter in Corpus Christi, and it is possible Buckeye suspended operations at its 50,000 b/d splitter.
* The Texas Gulf Coast is home to 4.944 million b/d of refining capacity, while the Louisiana Gulf Coast is home to 3.696 million b/d of capacity, according to the US Energy Information Administration.
OFFSHORE OIL AND GAS PRODUCTION
* Offshore operators in the US Gulf of Mexico have shut in more than 428,68 b/d of oil output, 24.49% of total Gulf of Mexico production, and 0.835 Bcf/d of natural gas output, 25.95% of production, according to a US Bureau of Safety and Environmental Enforcement survey Saturday.
* Shell shut in production at its Enchilada Salsa operation in the US Gulf of Mexico late Thursday. Enchilada and Salsa are two fixed production platforms which feed the Augur pipeline system. The 174-mile Auger pipeline can carry as much as 200,000 b/d of crude from the Central Gulf of Mexico via the Ship Shoal system to St. James, Louisiana. It can also carry an additional 35,000 b/d into Houma, Louisiana, via Eugene Island. Shell safely shut in about 100,000 b/d at Perdido, a floating platform which serves as a production hub for Great White, Tobago and Silvertip output.
* ExxonMobil has begun to curtail oil and natural gas production from the Galveston 209 platform and is preparing the facility for evacuation, a company spokeswoman said Thursday.
* Anadarko Petroleum shut in production at its operated Constitution, Heidelberg and Holstein platforms in the Gulf of Mexico further east in the Green Canyon area offshore Louisiana, due to shut ins at third-party pipelines. Anadarko shut in production at four fields offshore Texas: the Boomvang, Nansen, Gunnison and Lucius facilities. Boomvang and Nansen are sited in the East Breaks area of the Gulf, nearer the Texas coast than the other two fields, while Gunnison is located in Garden Banks further west and Lucius is in southeast Keathley Canyon, sited south of Garden Banks.
* ConocoPhillips has evacuated non-essential personnel from its Magnolia offshore US Gulf of Mexico producing platform, the company said. Magnolia's gross production in 2016 was 4,000 boe/d, of which 3,000 boe/d was net to ConocoPhillips.
ONSHORE OIL AND GAS PRODUCTION
* Oil operators have shut in what may amount to hundreds or even thousands of wells in the onshore Eagle Ford Shale in South Texas, which sits directly in the path of Harvey. Eagle Ford oil production is currently around 1.34 million b/d, according to Platts Analytics' Bentek Energy.
* BHP Billiton and Murphy Oil shut down all or some Eagle Ford operations. BHP produced nearly 99,000 b/d of oil equivalent from the Eagle Ford in the quarter ended June 30, 2017 which included about 71,000 b/d of liquids and about 166,000 Mcf/d of natural gas. Murphy has two rigs in the Eagle Ford, and produced 46,000 boe/d from the play in the second quarter, 87% of which was liquids.
* ConocoPhillips suspended production from the Eagle Ford, where it was producing 161,000 boe/d at the end of 2016, and shut down its six rigs there.
* Statoil, which operates two rigs in the Eagle Ford, said it was securing its rigs and wells and evacuating rig personnel, as well as suspending all non-essential activities.
* Kinder Morgan shut down "select systems" of its 300,000 b/d crude and condensate pipeline in Texas. The shut-in is being implemented on the 250-mile Kinder Morgan Crude and Condensate line. The company is also implementing a partial shut down of its Double Eagle, Texas Gas Pipeline, Texas Natural Gas Pipeline and the Texas Interstates systems. All of the company's terminals along the Houston Ship Channel were open Friday.
* Colonial Pipeline said it does not expect any operational issues from the incoming storm. Colonial's gasoline-only Line 1 runs from Pasadena, Texas, to Greensboro, North Carolina, where it meets the 1.16 million b/d distillate-carrying Line 2. From there, the 855,000 b/d multi-product Line 3 runs to Linden, New Jersey.
PORTS AND TERMINALS
* Corpus Christi area ports remained closed Saturday, and so far there are no reported oil spills or damages to storage tanks. The port of Brownsville, located further south on the Texas/Mexico border, reopened.
* All ports in the Galveston Bay port complex will remain closed for the next 24 to 48 hours, but initial steps are being worked out to open some parts of the upper Houston Ship Channel with Hurricane Harvey showing signs of a slowdown, the Greater Houston Port Bureau said Saturday.
* The US Coast Guard set Zulu condition Friday for four major ports in the Houston-Galveston area complex, closing ports to all inbound and outbound traffic, including crude oil tankers, at the Port of Houston, Port of Texas City, Port of Galveston and Port of Freeport.
* Further north along the Texas coast, pilots on the Sabine Pass and at Port Neches had normal traffic flows. Lake Charles, Louisiana, also had normal traffic flows Friday morning, but service was expected to be interrupted at some point Friday as the weather worsened, a port report said.
* Phillips 66 suspended operations at its Freeport, Texas, terminal after Port Freeport was closed, which will impact LPG exports and crude imports at the facility. The Freeport Liquefied Petroleum Gas Export Terminal started operations in December and can export 150,000 b/d of LPG to Europe, Latin America and Asia. The LPG export project was an expansion of the existing marine terminal in Freeport which also serves Phillips 66's nearby 247,000 b/d Sweeny, Texas, refinery. The refinery is said to be still operating, but crude imports will be curtailed because of the port closure.
* NuStar Energy said it had completed fully shutting down its crude and refined products terminal in Corpus Christi. NuStar's North Beach Terminal at Corpus Christi includes a 1.6 million-barrel crude facility, and 10 storage tanks with a combined capacity of 327,000 barrels for gasoline, distillates, xylene and toluene, and a 72-mile, 15,000 b/d pipeline that carries refined products and chemicals.
* Magellan suspended operations at its crude terminal and condensate splitter in Corpus Christi. The midstream player operates a 3.5 million-barrel crude and condensate storage storage and a 50,000 b/d condensate splitter at the facility. The company's refined products and crude oil pipelines in the Houston Ship Channel area are operating normally.
* Buckeye Texas Partners has suspended all marine terminal operations in Corpus Christi and also initiated a full shutdown of its crude, condensate, fuel oil and naphtha storage facilities in the area, a company official said. The company's facilities at Corpus Christi include 2.3 million barrels of storage for crude, condensate, fuel oil and naphtha and three deepwater docks of a maximum draft of 45 feet that can load Aframax vessels.
--Staff reports, email@example.com
--Edited by Jason Lindquist, firstname.lastname@example.org