Power outages from Nicholas disrupt energy production, vessel activity
Hurricane Nicholas on Tuesday took another swipe at U.S. Gulf Coast energy facilities, cutting offshore oil and gas output gradually recovering from the last storm and disrupting power to onshore pipeline, gas and chemical plants.
Royal Dutch Shell halted production its Perdido offshore oil platform due to heavy winds, and U.S. liquefied natural gas producer Freeport LNG said processing at its Texas coast facility was halted, likely due to a power outage.
Power losses briefly cut Colonial Pipeline’s main gasoline and diesel lines out of Houston, with its gasoline line resuming some shipments midday. Outages also halted production at Lyondell Basell’s plastics plant in Matagorda County, Texas.
Shipping at several Texas and Louisiana ports also ground to a halt on heavy seas and power outages.
Gulf Coast oil refiners were largely unscathed. Citgo Petroleum and Phillips Petroleum said their operations in Texas and Louisiana were continuing. Shell also said its Deer Park, Texas, plant ran through the storm.
Nicholas made landfall as Category 1 hurricane on Monday, the second storm in two weeks to hit major oil and refining hubs at the U.S. Gulf Coast. The region had just been starting to recover from Hurricane Ida.
Over 40% of the Gulf’s oil output remained shut on Monday after Ida, a Category 4 storm, damaged offshore infrastructure and other critical energy facilities in Louisiana.
U.S. gasoline futures were up slightly on Tuesday, at $2.1691 a gallon, while benchmark U.S. oil futures were trading flat $70.33 a barrel.
Shell said it was ready to restart production at its offshore Perdido platform once power is restored to a receiving facility. The company had no plans to return staff to the offshore facility on Tuesday.
Nicholas, downgraded to a tropical storm, was moving slowly toward the northeast and expected to turn eastward on Wednesday over Louisiana, where many energy facilities are still struggling to recover from Ida.
Over 425,000 customers in Texas were without power due to the storm, including 150,000 in Houston, according to mayor Sylvester Turner. Vessel traffic was idled on Tuesday morning at the Houston Ship Channel as pilots continued to suspend activity while Nicholas moved through the area, a pilot official said.
The ports of Houston, Freeport, Galveston and Texas City were open with restrictions, according to the U.S. Coast Guard. The Port of Houston and Freeport Harbor Channel both reported power outages.
Vessel traffic on the Calcasieu Ship Channel was also suspended on Tuesday, the Lake Charles, Louisiana, Pilots Association said. The pilots bring vessels delivering or loading at oil and chemical plants in the Port of Lake Charles.
Texas and Louisiana ports set restrictions while Nicholas passes through, and some shippers expect these to add to delays from infrastructure woes caused by Hurricane Ida for loading vessels with U.S. crudes for exports and discharging oil imports for refining.
Source: Reuters (Reporting by Liz Hampton in Denver and Marianna Parraga in Houston; Editing by David Gregorio)