Important U.S. refineries along the Texas coast are checking for possible damages Saturday after Hurricane Harvey barreled into the state as a monstrous, Category 4 storm.
Many refineries near the eye of the storm, including two owned by the U.S.'s largest refiner, Valero Energy Corp. (VLO), had shut down plant operations before the storm's arrival for safety reasons and to allow employees to evacuate with family or take other steps.
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"Valero's Corpus Christi and Three Rivers refineries are conducting a thorough assessment of refinery status and potential impacts from Hurricane Harvey's landfall," Valero said in a statement Saturday. Those two refineries can process a combined 380,000 barrels a day.
Valero didn't say when the refineries may restart, but said it continues to track the storm, adding its other Gulf Coast refineries are still operating.
Data-tracking firm Genscape estimates a total of more than 800,000 barrels a day of refining capacity was taken offline ahead of the storm. The main closures were at refineries near Corpus Christi that faced the brunt of the storm, including those owned by Valero, and others owned by Venezuela's Citgo and Wichita, Kan.-based Flint Hills Resources. By shutting down refineries before the storm's powerful arrival, refiners avoided possibly being forced to quickly power down in a risky manner due to electricty outages or other problems.
In all, the Texas Gulf Coast region is the largest fuel producing region in the U.S. with 17 refineries and about 5 million barrels a day of capacity, according to the U.S. Department of Energy.
Hurricane Harvey has since been downgraded to a Category 1 by the National Hurricane Center, and may drop further to tropical storm status, though officials warn heavy rain and strong winds could continue for days.
Refineries near Houston have avoided a direct hit from the hurricane, though officials at the National Hurricane Center say they remain in a danger zone that is subject to severe flooding in the coming days.
LyondellBasell's (LYB) 264,000-barrel-a-day refinery along the Houston Ship Channel continues to operate Saturday, albeit at a reduced rate due to logistical constraints in the ship channel, the company said.
"But [the reduced rates is] not due to the impact of storm on the plant itself," it added. "There are no operational issues affecting refining rates at this time."
Exxon Mobil Corp.'s (XOM) Gulf Coast refineries, including its large, 560,000-barrel-a-day Baytown refinery outside Houston, and the 365,000-barrel-a-day Beaumont refinery east of Houston, "are still operating as normal," spokeswoman Suann Guthrie said in an email.
Concerns over Texas refineries' closures and the impact on overall U.S. fuel supplies caused gasoline prices in futures markets to whipsaw in recent days. The RBOB October gasoline contract price spiked nearly 10 cents a gallon on Wednesday and Thursday, to $1.59/gallon. But on Friday, the price dropped back to $1.54/gallon as some investors felt the hurricane impact on a still-oversupplied market might be short-lived.
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(END) Dow Jones Newswires
August 26, 2017 13:39 ET (17:39 GMT)