Business

Largest US refinery shut due to flooding from Harvey

Largest US refinery shut due to flooding from Harvey

Colonial Pipeline, the main conduit for gasoline and diesel from the Gulf Coast to the eastern US, is already operating at reduced rates because it is not receiving supply from the Houston area.

Motiva Enterprises said Tuesday that its big refinery in Port Arthur, Texas, was dealing with restrictions in the flow of crude oil coming in and products like gasoline going out through pipelines and ports.

The blasts happened as floodwaters from days of relentless rain began to recede and the threat of major dangers from the storm shifted to a region near the Texas-Louisiana line. Around 15 percent of the nation's refinery capacity has been knocked out. As a result of this, Bloomberg reports gasoline hit a two-year high as it rose to $1.8422 per gallon on the New York Mercantile Exchange.

Motiva, owned by Saudi Aramco started its controlled shutdown of a facility in Port Arthur early Wednesday having reduced the capacity gradually on Tuesday to just 40%.

The city, about 90 miles east of Houston, was slammed with around 40 inches of rain, and flash-flood emergencies also have been issued there and in Beaumont, KFDM-TV reported.

USA gasoline futures on Tuesday rose 0.9 percent to $1.73 a gallon, and have jumped about 6 percent since last Wednesday's prestorm close.

Harvey first made landfall Friday in Texas as a Category 4 hurricane.

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Now that Harvey has moved away from south Texas, Valero Energy Inc., Citgo Petroleum Corp. and Flint Hills Resources LLC are preparing to restart those Corpus Christi refineries, according to regulatory filings and people familiar who asked not to be identified because the plans aren't public.

It joins more than a dozen other plants in Texas with combined capacity of more than 4 million barrels a day that have slowed production since Harvey approached the coast late last week. The area is capable of 2.7 million barrels being refined daily or 14% of the total capacity in the U.S. A return to that level won't be quick or easy. Motiva said Monday that operations at the plant were "stable".

Port Arthur is home the the nation's largest oil refinery.

The largest refinery in the country has cut output by almost half as it deals with Tropical Storm Harvey, which continues to pummel the Texas Gulf Coast.

Evacuees sit in the bleachers at the Bowers Civic Center in Port Arthur, Texas, as it floods on Wednesday.

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Harvey's disruption of the petroleum industry has driven gasoline futures prices up almost 17 percent over the past week. That's up nearly 17 percent from settlement a week ago.


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