Sec­ond land­fall wor­ries re­fin­ers

Area near Louisiana bor­der has 1.65 mil­lion bar­rels a day of ca­pac­ity.

Austin American-Statesman - - BUSINESS - By Brian K. Sul­li­van and David Marino Bloomberg News

Just as re­fin­ers in South Texas are start­ing to re­cover from Har­vey, fore­cast­ers have the storm gear­ing up for a sec­ond land­fall in an area far­ther east that in­cludes the na­tion’s largest re­fin­ery.

As the storm moves to­ward the Texas-Louisiana bor­der from its present lo­ca­tion over the Gulf of Mex­ico, Mo­tiva En­ter­prises LLC’s Port Arthur fa­cil­ity, the largest in the U.S., re­mains open but is run­ning at 60 per­cent ca­pac­ity with sup­ply is­sues, spokeswoman An­gela Good­win said in email. Valero Corp.’s Port Arthur op­er­a­tion has al­ready closed two units be­cause of flood­ing, To­tal SA’s plant there is said to cut its out­put to a min­i­mum and Exxon Mo­bil Corp.’s nearby Beau­mont re­fin­ery is said to be shut­ting down be­cause of flood­ing.

The area near the Louisiana line has 1.65 mil­lion bar­rels a day of re­fin­ing ca­pac­ity, ac­cord­ing to Andy Lipow, pres­i­dent of Lipow Oil As­so­ci­ates LLC.

Har­vey ini­tially reached the coast near Rock­port on Fri­day, and was quickly down­graded to a trop­i­cal storm from a Cat­e­gory 4 hur­ri­cane. Since then, a shift back over the Gulf ’s warm

wa­ters has re-en­er­gized it. The new land­fall, forecast for Wed­nes­day, could bring two more feet of rain, fore­cast­ers say.

While flood­ing is the pri­mary prob­lem for re­finer­ies in Har­vey’s af­ter­math, it’s not the only one. Marathon Pe­tro­leum Corp.’s Galve­ston Bay re­fin­ery, for in­stance, is said to be shut­ting be­cause pipe­line dis­rup­tions have led to the plant run­ning out of crude.

Mean­while, as the storm churns far­ther to the east, some plants near where Har­vey had its ini­tial land­fall may be up and run­ning again soon.

Valero and Citgo Pe­tro­leum Corp. were said to be pre­par­ing to restart their re­finer­ies in Cor­pus Christi af­ter Har­vey moved through over the week­end, ac­cord­ing to peo­ple fa­mil­iar who asked not to be iden­ti­fied be­cause the plans aren’t pub­lic. Valero’s Three Rivers re­fin­ery may restart as soon as this week.

Even as plants re­cover, the restarts will be de­layed by dis­tri­bu­tion is­sues and crude sup­ply, Sandy Fielden, di­rec­tor of oil and prod­ucts re­search at Morn­ingstar Com­modi­ties Re­search, wrote in a note. Ad­di­tion­ally, con­cerns are com­pounded by port clo­sures, he said, that “cuts off the sup­ply of im­ports.”

The Port of Houston has no time­line for re­open­ing, while Cor­pus Christi’s port is ex­pected to re­sume nor­mal op­er­a­tions by Sept. 4.

Colo­nial Pipe­line, the main con­duit for gaso­line and diesel from the Gulf Coast to the eastern U.S., is al­ready not re­ceiv­ing sup­ply from the Houston area. The loss of re­finer­ies around Port Arthur, Texas, would leave only Louisiana re­finer­ies sup­ply­ing fuel to New York and other de­mand centers.

The re­gion from Houston to Sabine Pass, home to re­finer­ies, chem­i­cal plants and en­ergy ports, will get any­where from six to 12 inches of ad­di­tional rain through Fri­day, ac­cord­ing to the Na­tional Hur­ri­cane Cen­ter in Mi­ami. As much as 10 inches could fall in south­east­ern Louisiana.

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