Oil refineries and chemical plants along the coasts of Texas and Louisiana are scrambling to shut operations as Hurricane Laura is developing into a strong hurricane and on course to hit the nation’s energy and refining hub this week. Some of the major refining facilities in the US are winding down in advance of Laura, shutting nearly 2.9 million bpd of capacity, about 30% of the 9.3 million bpd capacity in the US Gulf Coast. Upstream producers have taken offline about 82% of crude production and 57% of natural gas output in the region.
Motiva was halting operations at its 607,000-bpd oil refinery and chemical plant in Port Arthur, Texas, on Tuesday, Bloomberg reported. Valero Energy was also shutting its 335,000-bpd Port Arthur plants. Total SE said it was gradually shuttering its 225,500-bpd refinery there. The city of Port Arthur has ordered some residents to evacuate ahead of the storm.
Meanwhile, ExxonMobil has started the shutdown of its 560,500-bpd refinery in Baytown and 369,000-bpd refinery in Beaumont. Phillips 66 is halting processing at its 260,000-bpd Lake Charles refinery. Citgo Petroleum’s 418,000-bpd refinery in Lake Charles was also shutting operations, the report said.
The refinery shutdown and concerns over disruptions stemming from Laura have boosted gasoline prices in the US. Gasoline futures jumped 5.3% on Tuesday, which marked a second straight day of the increase. However, analysts said that the increase would not be as significant as the rise caused by Hurricane Harvey. Demand is still relatively weak due to the COVID-19 pandemic, while gasoline inventories are higher than a year earlier.
