By Jennifer Hiller
HOUSTON (Reuters) - Texas's freeze entered a sixth day on Thursday, as the largest energy-producing state in the United States grappled with massive refining outages and oil and gas shutins that rippled beyond its borders into neighboring Mexico.
The cold snap, which has killed at least 21 people and knocked out power to more than 4 million people in Texas, is not expected to let up until this weekend. The deep freeze has shut in about one-fifth of the nation's refining capacity and closed oil and natural gas production across the state.
The outages in Texas also affected power generation in Mexico, with exports of natural gas via pipeline dropping off by about 75% over the last week, according to preliminary Refinitiv Eikon data.
Texas Governor Greg Abbott directed the state's natural gas providers not to ship outside Texas and asked state regulators to enforce that ban, prompting reviews.
The state's electrical grid operator, ERCOT, was trying to restore power as thermal generators - those powered by natural gas, coal and other fuels - lost the capability to provide power as valves and pipes froze.
It is unclear whether Abbott or regulators will be able to enforce a ban on interstate or cross-border shipments. Abbott's request to the Texas Railroad Commission, the state's oil and gas regulator, set up a game of political football, according to a person familiar with the matter, between groups that do not have the authority to interfere with interstate commerce.
Texas exports gas via pipeline to Mexico and via ships carrying liquefied natural gas (LNG) from terminals in Freeport and Corpus Christi. It also supplies numerous regions of the country, including the U.S. Midwest and Northeast.
The ban prompted a response from officials in Mexico, as U.S. gas pipeline exports to Mexico fell to 4.3 billion cubic feet per day on Wednesday, down from an average over the past 30 days of 5.7 billion, according to data from Refinitiv.
The Mexican government called the top U.S. representative in Mexico on Wednesday to press for natural gas supplies as power cuts there have hit millions of residents.
While the storm is moving out of Texas, freezing temperatures remain and refining operations in particular might take days, if not weeks, to resume.
"The oil and gas industry is finally getting some power into these fields. The Delaware Basin is getting back online and gas is starting to move out of it," Christi Craddick, Texas railroad commissioner, said on Wednesday night during an emergency meeting.
Nonetheless, U.S. West Texas Intermediate (WTI) crude futures were near their highest since Jan. 8, 2020. Natural gas futures hovered near a three-month peak. Next-day prices at Waha hub in the Permian basin in West Texas eased from all-time peak of $209.75 per mmBtu.
BIG OPERATIONS IN TEXAS
Texas is the nation's biggest fossil fuel energy producer, but its operators, unlike those in North Dakota or Alaska, are not used to frigid temperatures.
The state accounts for roughly one-quarter of U.S. natural gas production. As of Feb. 10, Texas was producing about 7.9 billion cubic feet per day, but that fell to around 2 billion on Wednesday, according to Refinitiv Eikon data.
Overall U.S. natural gas output also slumped to the lowest level since January 2017. One billion cubic feet of gas can supply about 5 million U.S. homes per day.
About 4 million barrels of daily refining capacity has been shuttered and at least 1 million barrels per day of oil production is also out.
The Houston Ship Channel, a key export waterway, was shuttered again on Wednesday evening, but that was because refineries were not loading enough vessels and not due to the weather, a Houston Pilots dispatcher said.
"We have two departures at 09:30 (local time) this morning and two inbound vessels who are waiting for the water levels to come up," the dispatcher said.
Next-day power for Thursday at the ERCOT North hub, which includes the cities of Dallas and Fort Worth, were mired near a record high of $8,800 per MWh hit in the last session. Prices were below $50 per MWh before the cold blast.