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East Texas refineries shut key units, cut back production after Imelda

Kitco News

HOUSTON (Reuters) - East Texas refineries shut key units on Thursday night and cut production after Tropical Storm Imelda brought days of heavy rain over the region, rivaling the inundation from 2017’s Hurricane Harvey.

More than 40 inches (102 cm) of rain fell on Thursday across Jefferson County, which includes Beaumont and Port Arthur.

Exxon Mobil Corp shut the large crude distillation unit (CDU) at its 369,024 barrel-per-day (bpd) Beaumont, Texas, refinery on Thursday night, said energy industry intelligence service Genscape.

Exxon shut the 240,000 bpd Crude B CDU on Thursday night, Genscape said. Sources familiar with plant operations had told Reuters on Thursday the refinery was limping after shutting some units.

U.S. Gulf Coast gasoline spot prices have risen to two-year highs as refiners have cut output in the region. CBOB gasoline gained a penny on Thursday to trade at 3.25 cents per gallon above the gasoline futures contract, the highest since Sept. 12, 2017, traders said.

Valero Energy Corp shut the small CDU at its 335,000 bpd Port Arthur, Texas, refinery on Thursday night, Genscape said.

The refinery had cut production on Thursday because flooded highways kept trucks from hauling away sulfur produced in making motor fuels, sources told Reuters. The sulfur threatens to overwhelm the refinery’s sulfur recovery units. Federal regulations require the removal of sulfur from motor fuels.

Production was also cut at Total SA’s (TOTF.PA) 225,500 bpd Port Arthur, Texas, refinery as flooding on area roads also prevented sulfur removal, Gulf Coast market sources said.

Total may have to begin idling the refinery by early next week if it cannot haul away the sulfur, the sources said.

Reporting by Erwin Seba in Houston and Stephanie Kelly in New York; Editing by Jon Boyle

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