New York — US Gulf Coast refineries and ports were in the process of returning to service Friday, as the industry continued its recovery efforts following Hurricane Harvey. While roughly 2.9 million-3.9 million b/d of Texas refining capacity remained off-line, Valero was looking to resume full operations at its Corpus Christi and Three Rivers plants in several days, while Citgo said it was restarting its Corpus Christi plant.
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The US Coast Guard opened the Port of Corpus Christi Thursday to vessel traffic, with some restrictions, and Platts cFlow trade-flow software shows several crude tankers entering the port over the past day.
Three crude vessels have also entered Lake Charles, Louisiana, cFlow showed. It has also been opened to traffic.
With refiners and ports returning, gasoline prices fell Friday as traders were more confident supply would return to the market. NYMEX October RBOB futures settled down 3.31 cents/gal at $1.7479/gal Friday.
* Roughly 2.9 million b/d of Texas refinery capacity remained down Friday, or 16% of total US capacity. Assuming that the plants in partial shutdown or returning are at 50% of capacity, that would put the figure at roughly 3.9 million b/d, or 21% of US capacity.
Full shutdown: (Company: Location -- Capacity (b/d))
- ExxonMobil: Baytown, TX -- 560,500
- ExxonMobil: Beaumont, TX -- 362,300
- Magellan: Corpus Christi, TX -- 50,000
- Buckeye: Corpus Christi, TX -- 50,000
- Shell: Deer Park, TX -- 340,000
- Petrobras: Pasadena, TX -- 112,229
- Motiva: Port Arthur, TX -- 603,000
- Total: Port Arthur, TX -- 225,500
- Valero: Port Arthur, TX -- 335,000
- Phillips 66: Sweeny, TX -- 247,000
Total capacity closed: 2,885,529
Share of US capacity: 16%
Partial shutdown/returning: (Company: Location -- Capacity (b/d); 50% of Capacity (b/d))
- Flint Hills***: Corpus Christi, TX-West -- 230,000; 115,000
- Flint Hills***: Corpus Christi, TX-East -- 70,000; 35,000
- Citgo***: Corpus Christi, TX -- 157,500; 78,750
- Valero***: Corpus Christi, TX -- 293,000; 146,500
- Valero***: Three Rivers, TX -- 89,000; 44,500
- Lyondell: Houston, TX -- 263,776; 131,888
- Valero: Texas City, TX -- 225,000; 112,500
- Marathon***: Galveston Bay, TX -- 459,000; 229,500
- Marathon: Texas City, TX -- 86,000; 43,000
- Valero: Houston, TX -- 191,000; 95,500
Total capacity reduced: 1,032,138
Closed + reduced capacity: 3,917,667
Share of US capacity: 21%
* 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. Total US capacity is 18.557 million b/d.
* US Energy Secretary Rick Perry has authorized loans of as much as 4.5 million barrels of crude oil out of two Strategic Petroleum Reserve storage sites in Louisiana. Perry has authorized two requests from Phillips 66 Lake Charles refinery totaling 1 million barrels from the SPR's West Hackberry site in Louisiana, a request from Marathon Petroleum for 3 million barrels from the Bayou Choctaw and a request for 500,000 barrels from Valero from Bayou Choctaw. The requests total 3.9 million barrels of sweet crude and 600,000 barrels of sour crude. Phillips 66 spokesman Dennis Nuss said Friday that the company had decided to only take 700,000 barrels of crude from the US emergency stockpile -- 400,000 barrels of sweet and 300,000 barrels of sour -- as crude deliveries started back up with the reopening of the port of Lake Charles, Louisiana.
* The US has "high levels of stocks" in Hurricane Harvey-hit regions and more gasoline imports headed to the East Coast, leaving no need for a coordinated stockpile release yet, the International Energy Agency said Friday. IEA said it is "continuously monitoring the situation in Texas and Louisiana to assess its impact on oil and gas markets and is in very close contact with US authorities."
* The US Environmental Protection Agency Thursday expanded emergency gasoline waivers to include 38 states and the District of Columbia to prevent storm-related supply disruptions across the country as concerns mounted about Gulf Coast refining capacity. The agency waived through September 15 requirements for reformulated gasoline and low-volatility gasoline to 26 additional states. Previous waivers targeted gasoline markets in the South, Southeast and Mid-Atlantic regions. The latest waiver added Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont, Delaware, New Jersey, New York, Pennsylvania, West Virginia, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, South Dakota, Ohio, Oklahoma, Wisconsin, Arkansas and New Mexico. EPA said the sale of E15, gasoline with up to 15% ethanol, must continue to comply with federal rules.
PORTS AND TERMINALS
* The three Lake Charles, Louisiana, refineries are no longer cut off from tanker deliveries now that the Calcasieu Ship Channel and Lake Charles port have reopened -- eliminating their need for further SPR loans. Channing Hayden, director of navigation for the Lake Charles Harbor and Terminal District, said the queue of 19 inbound vessels and two outbound vessels has mostly cleared since the waterway reopened around 3 am Thursday. "We're basically back to normal operations," he said. Hayden did not know how many of those vessels might be heading to the refineries. "I do know we had some tankers -- both crude and product," he said. Platts cFlow shows the Houston Starr, Eagle Kinarut, and SCF Pearl crude tankers having entered the channel over the past 24 hours.
* The US Army Corps of Engineers has eight survey vessels underway in an effort to lift daylight-only restrictions in the Houston Ship Channel and allow vessels with a greater draft, like Aframax and Suezmax tankers, to navigate the waterway, the agency said Friday. At present, the channel is allowing vessels that require water depths of 33-37 feet to use the channel. But work is underway to lift that restriction, the Greater Houston Port Bureau said.
* The Coast Guard opened the Port of Corpus Christi Thursday, but kept some restrictions in place because it has not finished surveying all channels and inlets in the harbor. The Coast Guard said the port would be open with restrictions that no vessels with a draft greater than 43 feet will be allowed in and only one way transit is allowed for foreign vessels and tankers, which must carry two pilots and travel during daylight hours only. Data cFlow shows several vessels carrying crude entering the Port of Corpus Christi via Port Aransas over the past day. The Telleviken, Paramount Hanover and Galway Spirit were at Ingleside Friday, having spent several days offshore. The Texas port of Corpus Christi is still targeting September 4 for a return to normal operations.
PIPELINES AND RAIL
* Colonial Pipeline, the biggest US refined product pipeline, continues to pump products east from Lake Charles, Louisiana, despite problems with its facilities in Texas resulting from Hurricane Harvey. "Deliveries will be intermittent and dependent on terminal and refinery supply," the company said Thursday. Colonial is aiming to restart pumping of gasoline and distillates from Houston and Beaumont, Texas, from Sunday. The Colonial system runs from Houston to Linden, New Jersey, and supplies about 60% of the incoming supply of gasoline into the Atlantic Coast. Colonial has the ability to ship 1.37 million b/d of gasoline on its Line 1 and 1.16 million b/d of middle distillates on Line 2.
* Magellan Midstream has suspended operations on two long-haul pipelines -- BridgeTex and Longhorn. The two pipelines carry a combined 675,000 b/d of crude from the Permian Basin in Texas to the US Gulf Coast.
* 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.
* Harvey's impact on the US Gulf Coast has already delayed millions of barrels of oil product cargoes bound for Latin America, and fostered worries about further delays and increasing prices. Mexico, a large buyer of US Gulf Coast refined products, has turned to refineries along the Canadian and US Atlantic Coasts for fuel supply. A source with knowledge of Mexican imports said the country has been looking to purchase gasoline "everywhere" and that it still needs more imports to satisfy its supply needs.
ONSHORE AND OFFSHORE OIL PRODUCTION
* US Gulf of Mexico offshore production was recovering Friday. The US Bureau of Safety and Environmental Enforcement showed 152,989 b/d of oil output shut-in on Friday, or 8.74% of total Gulf of Mexico output. That was down from 428,568 b/d Saturday.
* Oil operators in the onshore Eagle Ford Shale in South Texas began to restart wells and related midstream facilities. Marathon Oil and EOG Resources were inspecting and assessing their Eagle Ford Shale operations in South Texas on Tuesday and have begun to restart production where possible. BHP Monday said it was ramping up production in the Eagle Ford. Before the storm hit, the Eagle Ford was producing about 1.341 million b/d of oil, and 5.1 Bcf/d of natural gas, according to data from Platts Analytics' Bentek Energy unit.
--Edited by Derek Sands, firstname.lastname@example.org