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Texas energy industry assesses damage after Hurricane Beryl batters Gulf coast

Published 07/08/2024, 06:07 AM
Updated 07/08/2024, 05:30 PM
© Reuters. FILE PHOTO: A Hurricane warning sign is pictured in Corpus Christi, Texas, U.S. July 7, 2024. REUTERS/Daniel Becerril/File Photo
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By Erwin Seba and Arathy Somasekhar

HOUSTON (Reuters) -The Texas energy industry was evaluating the impact from Hurricane Beryl on Monday after the powerful storm lashed the U.S. Gulf Coast, closing key shipping ports and hitting the oil refining and production sectors.

Beryl made landfall near the coastal town of Matagorda, Texas, on Monday morning, packing maximum sustained winds of 80 mph (129 kph) and posing problems for the heart of the country's energy sector.

The storm had strengthened to a Category 1 hurricane before landfall, but was downgraded to a tropical storm mid-morning and began weakening throughout the day. It is forecast to move across eastern Texas and into the Lower Mississippi Valley and Ohio Valley later in the week, according to the U.S. National Hurricane Center (NHC).

Texas is the largest U.S. oil and gas producing state, accounting for some 40% of the country's oil output and 20% of gas production.

U.S. crude futures settled 83 cents lower at $82.33 a barrel on Monday as hopes of a ceasefire deal in Gaza eased global supply concerns and capped gains driven by storm-related disruptions.

U.S. fuel futures were also trading lower as major refineries along the Gulf Coast so far appeared to see minimal impacts from the storm.

"Since the storm has threaded the needle between the two major production hubs in Corpus Christi and Houston, it seems that the threat of regional supply disruptions has passed," said fuel marketer TAC Energy, noting that only Phillips 66 (NYSE:PSX)'s Sweeny, Texas, facility was in the immediate path of the storm.

Phillips 66 said its Sweeny and Lake Charles, Louisiana refineries had power and were operating.

More than 2.7 million homes and business in Texas were without power on Monday afternoon, according to PowerOutage.us.

CenterPoint Energy (NYSE:CNP), which provides power to the southern and eastern parts of the state, had 2.2 million customers without electricity, the company said, warning that outages may last for several days.

Heavy winds swept through Houston on Monday as streets and waterways flooded, according to Reuters witnesses and images on social media.

At least two people had died in the Houston area as a result of falling trees during the storm, according to Harris County Sheriff Ed Gonzalez.

ENERGY INDUSTRY HIT

The ship channel that leads to the Port of Corpus Christi, the country's leading crude oil export hub, reopened on Monday afternoon after having no significant impact from the storm.

The port and the channel had closed on Sunday. At least three vessels entered the Corpus Christi bay on Monday, ship tracking data on Kpler and LSEG showed.

Gibson Energy (TSX:GEI) said its Gateway crude export terminal in Corpus Christi was operational. Enbridge (NYSE:ENB), which also runs crude oil export facilities near Corpus Christi, said all of its assets, with the exception of its Tres Palacios gas storage facility, were operational.

Terminal operations at the Port of Houston will remain closed on Tuesday as it continues to assess and repair damage on Monday afternoon, the port said in a statement.

"We are still dealing with rain and wind," a spokesperson said.

The port closure left a few vessels stranded off Galveston, said Rohit Rathod, an analyst at energy data firm Vortexa, adding that congestion should ease from Tuesday without a major impact on weekly trade flows.

Shell (LON:SHEL) and Chevron (NYSE:CVX) said they had shut production or evacuated personnel from their Gulf of Mexico offshore platforms. The U.S. Gulf of Mexico produces some 1.8 million barrels per day of oil, roughly 14% of total U.S. output. It was not immediately clear how much production had been shut in as a result of Beryl.

Freeport LNG, the third-largest liquefied natural gas facility in the U.S., said over the weekend it had ramped down production and it would resume operations after the storm had passed.

Formosa Plastics, meanwhile, experienced a malfunction with a gas compressor system during a shutdown for the storm at its Point Comfort facility, according to a state regulatory filing. Formosa said it has temporarily shut down operations at its Point Comfort plant site, and it is actively monitoring the situation.

© Reuters. FILE PHOTO: A Hurricane warning sign is pictured in Corpus Christi, Texas, U.S. July 7, 2024. REUTERS/Daniel Becerril/File Photo

Refiner Citgo Petroleum Corp reduced production over the weekend at its 165,000 barrel-per-day Corpus Christi plant, sources said.

Marathon Petroleum (NYSE:MPC) declined to comment on its 585,000-bpd Galveston Bay refinery operations. Chevron did not provide specific comments on the status of its Pasadena refinery southeast of Houston, and LyondellBasell declined to comment on its 268,000-bpd Houston refinery.

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