More refineries, Colonial Pipeline lines restarting after Harvey

Sept. 5, 2017
US Gulf Coast refiners and shippers continue to restore operations amid possible damages and logistical constraints caused by Hurricane and Tropical Storm Harvey. Meanwhile, upstream firms are still monitoring the midstream and downstream recovery to determine how much oil and gas they can produce.

New information from DOE, ExxonMobil, and Motiva was added to this story on Sept. 5.

US Gulf Coast refiners and shippers continue to restore operations amid possible damages and logistical constraints caused by Hurricane and Tropical Storm Harvey. Meanwhile, upstream firms are still monitoring the midstream and downstream recovery to determine how much oil and gas they can produce.

Colonial Pipeline Co. said it restarted its distillate Line 2 between Houston and Lake Charles, La., on Sept. 4 and its gasoline Line 2 between Houston and Lake Charles on Sept. 5.

Colonial had continued to ship available gasoline and other refined products from Louisiana-based refineries and other refineries on the Colonial system east of Lake Charles.

As of 1:30 p.m. CDT on Sept. 5, five Gulf Coast refineries had begun the process of restarting after being shut down, the US Department of Energy reported. This process may take several days or weeks to start producing product depending whether any damage is found during restart.

The restarting refineries have a combined capacity of 1.55 million b/d, or 16% of total Gulf Coast (PADD 3) refining capacity and 8.4% of total US refining capacity.

At least seven refineries in the US Gulf Coast were operating at reduced rates as of midday Sept. 5, according to public reports. These refineries have a combined total capacity of 1.67 million b/d, or 17.2% of total Gulf Coast (PADD 3) refining capacity and 9% of total US refining capacity.

Six refineries in the region were shut down representing a combined capacity of 1.66 million b/d, or 17.2% of total Gulf Coast (PADD 3) refining capacity and 9% of total US refining capacity.

Motiva Enterprises LLC, a wholly owned subsidiary of Saudi Aramco's Saudi Refining Inc. (SRI), said on Sept. 5 its 600,000-b/d refinery in Port Arthur, Tex., is in the final phases of equipment assessments and initial phases of startup. It expects the refinery to initially return to 40% production "by the end of this weekend provided that the final assessments meet our operational standards."

ExxonMobil Corp. said facility assessments and restart activities continue at its 584,000-b/d Baytown, Tex., refinery. The firm added that it has made progress in restarting chemical production, pipelines, and other logistical infrastructure in the Houston area.

Valero Energy Corp. said on Sept. 4 that its 293,000-b/d Corpus Christi and 225,000-b/d Texas City refineries are at pre-hurricane rates.

Its 89,000-b/d Three Rivers refinery continues to ramp up and 191,000-b/d Houston refinery will increase rates as transportation and logistics infrastructure becomes more available. Its 335,000-b/d Port Arthur refinery is in the final stages of assessment and preparing to resume operations.

DOE late last week okayed release of more crude from the Strategic Petroleum Reserve—this time up to 4.5 million bbl—after saying it would send 500,000 bbl to Phillips 66’s 249,000-b/d Lake Charles refinery (OGJ Online, Sept. 1 , 2017).

For now, Marathon Petroleum Corp. is taking 3 million bbl while Valero is receiving 500,000 bbl.

Ports reopening

The Port of Corpus Christi in Texas fully reopened on Sept. 4 after the Paragon DPDS 1 drillship was removed from blocking a section of the port, Corpus Christi Business News reported. It ran aground during the storm after breaking free of its moorings. Corpus Christi accounted for 245,000 b/d of crude imports from January through May.

DOE reported on Sept. 4 that the Houston Ship Channel was open to just past ExxonMobil’s Baytown refinery to vessels with up to a 40-ft draft. Ships were exiting and entering the channel at the time.

Platts noted that a sunken dry dock in the waterway has impeded passage of crude carriers in the Houston Ship Channel. Houston accounted for 646,000 b/d of crude imports during this year’s first 5 months.

Magellan Midstream Partners LP has restarted two long-haul Texas crude pipelines–the 400,000-b/d BridgeTex and 275,000-b/d Long Horn line—that run from southeast Texas to Magellan’s East Houston terminal along the Houston Ship Channel, the commodity and energy information services firm said. Magellan has started up a 180,000-b/d refined products pipeline that begins at its East Houston terminal in Texas.

Enterprise Product Partners LP said it has restarted commercial service of its two marine terminals, where loadings of ethane, LPG, and polymer-grade propylene ships have now resumed (OGJ Online, Sept. 5, 2017).

The ports of Beaumont, Port Arthur, Galveston, and Texas City in Texas and Lake Charles in Louisiana were all open with restrictions on Sept. 4. Platts said the three Lake Charles refineries are no longer cut off from tanker deliveries now that the Calcasieu Ship Channel and Lake Charles port have reopened.

As of 9:00 p.m. CDT on Sept. 4, 55 oil vessels were waiting in anchorage off Corpus Christi, Houston, Galveston, Freeport, Texas City, Beaumont, Nederland, Port Arthur, Port Neches, Sabine, and Lake Charles. The vessels were carrying an estimated total of 38 million bbl of crude.

Crude imports at ports impacted by Harvey along the Gulf Coast collectively averaged 2.1 million b/d from January through May.

Oil output nears normal

Onshore and offshore producers continue to ramp up activity toward prestorm levels as logistical and market bottlenecks are relieved. Minimal damage to upstream and midstream facilities has been reported by operators.

ConocoPhillips said on Sept. 5 its Eagle Ford production was running close to 80% of its prestorm rate of 130,000 boe/d.

The Houston independent noted that the increase remains dependent on access to third-party offtake and downstream infrastructure. Its NGL production, meanwhile, is expected to be the slowest to recover due to offtake constraints, which could persist for at least another week.

EOG Resources Inc. on Sept. 5 reduced the midpoint of its third-quarter US crude and condensate volume guidance range by 15,000 b/d due to the impact of Harvey on its Eagle Ford operations. The Houston firm’s full-year US crude and condensate volume guidance remains unchanged.

EOG, which suspended drilling and completion operations and shut in production in certain areas of South Texas ahead of Harvey making landfall, has begun to resume production as conditions permit.

Carrizo Oil & Gas Inc. reported on Sept. 5 that its assets and facilities in the Eagle Ford sustained no damage due to Harvey. The Houston firm suspended its drilling and completions operations in the play prior to the storm making landfall.

Crews were able to return to the field last week, and all of the firm’s operated Eagle Ford rigs and frac crews have resumed operations. Many of its third-party facilities have restarted and resumed taking oil and gas, and Carrizo expects to be able to ramp back to nearly full sales capacity in the play this week.

Offshore activity should be near prestorm levels by the 2-week mark from when personnel were first evacuated from US Gulf of Mexico platforms ahead of Hurricane Harvey’s passage. As of 11:30 a.m. CDT, personnel were evacuated from just 14 offshore production platforms, or 1.97% of the 737 manned platforms, according to estimates from the US Bureau of Safety and Environmental Enforcement.

BSEE estimated that just 6.94% of prestorm oil production, or 121.484 b/d, remained shut on Sept. 4. Prestorm output was about 1.75 million b/d. The agency also estimated that natural gas production was down by 8.05%, or 259.19 MMcfd of prestorm output of 3.22 bcfd.

ExxonMobil also said startup operations are under way from its Galveston 209 offshore platform systems. The firm's Hadrian South subsea production system has been deemed safe and operational, and production has resumed. Crews from subsidiary XTO Energy Inc. have begun assessments and are bringing onshore wells on line when safe to do so.

Contact Matt Zborowski at [email protected].