By Erwin Seba and Arathy Somasekhar
HOUSTON (Reuters) – Texas’ energy industry on Monday assessed the impact of Hurricane Beryl after the powerful storm battered the U.S. Gulf Coast, closing key shipping ports and hitting the oil refining and manufacturing sectors.
Beryl made landfall Monday morning near the coastal town of Matagorda, Texas, with maximum sustained winds of 79 miles per hour, causing trouble 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 by mid-morning and began to weaken during the day. The storm is expected to move through East Texas and the Lower Mississippi Valley and Ohio Valley later this week, according to the U.S. National Hurricane Center (NHC).
Texas is the largest oil and gas producing state in the US, producing about 40% of the country’s oil production and 20% of its gas production.
futures closed 83 cents lower at $82.33 a barrel on Monday as hopes for a ceasefire in Gaza eased concerns about global supply and capped gains caused by storm-related disruptions.
U.S. fuel futures also traded lower as major refineries along the Gulf Coast appeared to see minimal impact from the storm so far.
“Since the storm moved the needle between the two major manufacturing centers in Corpus Christi and Houston, it appears the threat of regional supply disruptions has passed,” says fuel marketer TAC Energy, noting that only Phillips 66 (NYSE:)’s Sweeny , Texas, the facility was in the direct path of the storm.
Phillips 66 said the refineries in Sweeny and Lake Charles, Louisiana had power and were operating.
According to PowerOutage.us, more than 2.7 million homes and businesses in Texas were without power as of Monday afternoon.
CenterPoint Energy (NYSE:), 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 could last 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 in the Houston area were killed by falling trees during the storm, according to Harris County Sheriff Ed Gonzalez.
ENERGY INDUSTRY HIT
The ship canal leading to the Port of Corpus Christi, the nation’s main crude oil export hub, reopened Monday afternoon after no significant impacts from the storm.
The port and canal were closed on Sunday. At least three ships entered the Corpus Christi Bay on Monday, ship tracking data from Kpler and LSEG show.
Gibson Energy (TSX:) said its Gateway crude oil export terminal in Corpus Christi was operational. Enbridge (NYSE:), which also operates crude oil export facilities near Corpus Christi, said all of its assets, with the exception of the Tres Palacios gas storage facility, were operational.
Terminal operations at the Port of Houston will remain closed Tuesday as damage is assessed and repaired Monday afternoon, the port said in a statement.
“We are still dealing with rain and wind,” said a spokesperson.
The port closure has left some ships stranded off the coast of Galveston, said Rohit Rathod, an analyst at energy data firm Vortexa, adding that congestion should ease starting Tuesday without major impact on weekly trade flows.
Shell (LON:) and Chevron (NYSE:) said they had closed production or evacuated personnel from their offshore platforms in the Gulf of Mexico. The U.S. Gulf of Mexico produces about 1.8 million barrels of oil per day, about 14% of total U.S. production. It was not immediately clear how much production had been halted as a result of Beryl.
Freeport LNG, the third-largest liquefaction plant in the U.S., said this weekend that it had cut production and would resume operations after the storm passed.
Formosa Plastics, meanwhile, experienced a gas compressor system failure during a storm-related shutdown at its Point Comfort facility, according to a government filing. Formosa said it has temporarily halted operations at its Point Comfort factory site and is actively monitoring the situation.
Refinery Citgo Petroleum Corp this weekend cut production at its 165,000 barrel-per-day Corpus Christi plant, sources said.
Marathon Petroleum (NYSE:) declined to comment on its 585,000 barrel per day Galveston Bay refinery operations. Chevron did not comment specifically on the status of its Pasadena refinery southeast of Houston, and LyondellBasell declined to comment on its 268,000 barrel-per-day Houston refinery.
