Energy Sector Recovery From Harvey Still Bumpy

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The oil & gas industry of south and east Texas continues to inspect facilities and begin the process of restarting production facilities, refineries, and transportation operations, including both pipelines and ports. That process is proceeding in fits and starts with some good news and some not so good.

As of the late afternoon Sunday, scattered thunderstorms were forecast in the Port Arthur area and flooding continued around Beaumont. The weather service also issued a flood warning for Buffalo Bayou in Harris County (Houston).

The U.S. Department of Energy (DoE) on Sunday posted its latest update on recovery efforts in the energy industry and several oil & gas companies have also posted their own updates. We’ll run through changes to those briefly as well.

First the good news. The DoE reports that the restart of the line 2 on the Colonial pipeline has been moved up from Tuesday to Monday for distillates (diesel and jet fuel) and to Tuesday for line 5 (gasoline). Of course the pipeline’s supply will continue to be constrained by the refinery shutdowns, but now at least there will be somewhere to put refinery output when it returns.

The number of refineries that have reported restart operations remains at seven. According to S&P Global Platts, both Flint Hills plants near Corpus Christi (300,000 barrels a day combined) are restarting as are the two Valero refineries in the same area (380,000 barrels a day) and the Citgo (157,500 barrels a day) and Marathon (259,000) barrels a day. Platts has reported that Exxon’s Baytown refinery (560,500 barrels a day) has begun to restart full operations. At least four other refineries are operating at reduced rates.

Exxon Mobil’s Beaumont complex (362,300 barrels a day) had some flooding late Saturday in the lower part of the refinery. The flooding did not affect the chemical plant.

The DoE has authorized the release of 5.3 million barrels of crude from the nation’s Strategic Petroleum Reserve. The Phillips 66 refinery at Lake Charles, Louisiana, has received 400,000 barrels of sweet crude and 600,000 barrels of sour crude in two releases. Valero has received 1 million barrels of sweet crude in two releases, Marathon has received 3 million barrels and Placid Refining has received 300,000 barrels.