Hurricane Harvey had weakened to a tropical storm as of 1 pm CDT Saturday with maximum sustained winds of 70 mph. Harvey was located about 45 miles west-northwest of Victoria, Texas, moving north-northwest at 2 mph and expected to move little over the next several days.
Harvey made landfall at about 10 pm CDT Friday between Port Aransas and Port O'Connor, Texas, as a Category 4 hurricane. Harvey is the strongest hurricane to impact Texas since 1961 and the first Category 4 storm to make landfall in the US since Hurricane Charley in 2004.
As of 10 am CDT Saturday, Harvey had weakened to a Category 1 hurricane with maximum sustained winds of 75 mph.
A federal major disaster declaration was approved for Texas on Friday.
Large swaths of oil, natural gas and power infrastructure along the Gulf of Mexico have been shut down.Nearly 300,000 electric customers were without power early Saturday.
Offshore Gulf of Mexico natural gas production on Friday was down 21% from the month-to-date average and was expected to drop even more over the weekend. The Texas Gulf Coast accounts for nearly 20% of total crude oil output and nearly one-third of domestic refining capacity, the US Energy Information Administration said Friday.
Natural gas prices at the benchmark Henry Hub fell 3 cents Friday to $2.932/MMBtu. The storm is expected to depress natural gas demand from the electric power and manufacturing sectors throughout the region for the next several days.
POWER
* The Electric Reliability Council of Texas reported more than 293,000 customers were without power as of 7:20 am Saturday. Approximately 157 circuits also were out of service. The ERCOT region includes Houston, Dallas, Fort Worth, San Antonio, Austin, Corpus Christi, Abilene and the Rio Grande Valley.
* ERCOT data showed Saturday's minimum load levels in the storm-affected area down about 19% in comparison with minimum loads on the morning of August 19. Hardest hit was the Southern weather region around Corpus Christi, where load was about 1,964 MW, down almost 40% from the same period August 19. Next was the Coastal region, which includes Houston and Galveston, where load was about 10,181 MW between 5 and 6 am, down about 17.5% from the same period August 19. The South Central region, which includes Austin and San Antonio, posted Saturday morning load of about 5,783 MW, down about 10.5% compared with the same period August 19.
* The US Department of Energy reported no significant power outages in Louisiana. However, impacted Texas and Louisiana utilities are expecting power outages to last several days. Restoration efforts cannot begin until weather conditions are safe. High rainfall totals and flooding could extend restoration times in many affected areas.
* AEP Texas estimated that as of 9 am Saturday that 200,000 consumers in Corpus Christi and surrounding areas were without power. The company also said that may end up being the peak outage number as the storm has weakened. AEP said that 2,300 personnel would be on hand to begin the restoration process, but wind conditions had to drop below 30 mph before trucks could be used to remove debris and downed power lines. "Right now, we are trying to determine if we can safely let crews begin this first step," said Tom Coad, AEP Texas vice president of distribution region operations. "At the same time, in areas where it is safe to do so, we will instruct our damage assessors to begin activities to determine the extent of the damage inflicted by Hurricane Harvey." Coad noted that initial reports indicate that significant damage did occur, particularly with transmission lines and facilities. "There are preliminary reports of 54 substations out of service and at least 56 transmission lines out of service," he said. Here is the breakdown of the areas with the largest numbers of outages as of 9 am Saturday:Aransas Pass, 47,000Corpus Christi Southside Area, 46,000Corpus Christi Midtown Area, 42,000Victoria, 24,000Port Lavaca, 14,000Corpus Christi Northwest Area, 9,000El Campo, 6,000Beeville, 6,000Sinton, 6,000
* CenterPoint Energy reported via Twitter that it had restored power to over 140,000 customers in the last 24 hours and would continue restoration efforts until the 3% who remain out are back on.
PRICES
* Almost all natural gas prices were lower Friday by a range of 3 to 7 cents. Henry Hub cash prices experienced a minimal drop of around 3 cents to $2.932/MMBtu, erasing much of Thursday's gains. However, prices increased 8 cents at Houston Ship Channel to $2.96/MMBtu and prices at the Katy Hub increased 10 cents to $2.98/MMBtu in response to supply access limitations.
* US natural gas prices throughout the Southeast slipped ahead of Hurricane Harvey's landfall along the Texas coast Friday as the storm was projected to reduce demand throughout the region for several days.
PRODUCTION
* Based on data from offshore operator reports submitted to the Bureau of Safety and Environmental Enforcement as of 11:30 am CDT Saturday, about 425,500 b/d of crude production and 835 MMcf/d of offshore natural gas production was shut in. Personnel have been evacuated from 112 production platforms, 15.2% of the 737 manned platforms in the Gulf of Mexico. Personnel also have been evacuated from five of the 10 rigs of this type currently operating in the Gulf. One DP rig has moved off location out of the storm's path as a precaution. Personnel remain on-board and will return to the location once the storm has passed.
* Total US dry gas production Friday morning was down 0.7 Bcf/d to 72.3 Bcf/d from the month-to-date average of 73.0 Bcf/d, according to data from Platts Analytics. Offshore Gulf production was responsible for nearly the entire drop. Offshore production Friday morning totaled 2.7 Bcf/d compared with a month-to-date average of 3.4 Bcf/d.
* In preparation for Harvey's impact, Kinetica Deepwater Express ceased operations on the Grand Chenier system in Lower Cameron Parish, Louisiana, while Sea Robin shut in the Erath Compressor Station and gas processing plant due to a drop in offshore receipts related to Hurricane Harvey. Enbridge evacuated non-essential personnel from its offshore facilities Friday morning.
* Australia's BHP Billiton said it shut in production and infrastructure at its Eagle Ford Shale operation in South Texas late Friday as Hurricane Harvey approached the area. The company produced nearly 99,000 b/d of oil equivalent from the Eagle Ford in the quarter ended June 30, which included about 71,000 b/d of liquids and 166,000 Mcf/d of natural gas.
* Anadarko Petroleum said late Friday it had shut in production at its operated Constitution, Heidelberg and Holstein platforms in the Gulf of Mexico further east in the Green Canyon area offshore Louisiana, due to shut-ins at third-party pipelines. The company's production at Boomvang, Nansen, Gunnison and Lucius further west remain shut in.
PIPELINES
* Kinder Morgan's Natural Gas Pipeline Company of America declared a force majeure on the Louisiana Line upstream of Compressor Station 342, located in Cameron Parish, Louisiana. "In response to these mandatory evacuations and weather conditions, in order to insure safe system operations and the safety of Natural's personnel, Compressor Station 342 will be unavailable until the force majeure event has been lifted," NGPL said in a notice to customers. Kinder Morgan on Friday also was implementing a partial shutdown of its Double Eagle, Texas Gas Pipeline, Texas Natural Gas Pipeline, the KMCC crude and condensate pipeline and the Texas Interstates systems. Energy Transfer Partners, operator of the Rover gas pipeline in the Northeast and Dakota Access crude pipeline, has seen minimal impact on its Gulf Coast operations so far, spokeswoman Vicki Granado said Friday afternoon. "We have started to see a reduction in volumes because of producer shut-ins in South Texas. However, our facilities remain operational," Granado said.
LNG
* Cheniere Energy, which owns the only LNG export facility currently operating in the Lower 48 states, plans to continue to keep operating its terminal in Sabine Pass, Louisiana. Cheniere spokesman Eben Burnham-Snyder said Train 3 is currently undergoing maintenance unrelated to Harvey.
* A spokesman for Freeport LNG Development said Friday that the Texas export terminal currently being built had shut down construction as a result of the storm. Construction had begun on the project's first three liquefaction trains, of 5 million mt/year each, which are expected to start operations sequentially between the fourth quarter of 2018 and the third quarter of 2019.
STORAGE
* Tres Palacios, a gas storage facility in Matagorda County, Texas, announced it has issued a force majeure and is shutting in and evacuating personnel from the 34.8-Bcf capacity facility to comply with the mandatory evacuation order for the entire county.
GAS PROCESSING
* Enterprise Products Partners shut down and evacuated its 280 MMcf/d Shoup natural gas processing and fractionation plant about 10 miles west of Corpus Christi, spokesman Rick Rainey said Friday afternoon. Based on projected storm forecasts, Gulf South anticipates that the 160 MMcf/d Enterprise Burns gas processing plant in Louisiana would continue processing. However, if conditions change and Enterprise shuts in the plant, Gulf South will operate in plant bypass mode for the duration of the outage, the company said.
PETROCHEMICALS
* Formosa Plastics shut in its Point Comfort, Texas, petrochemical complex and implemented its "tropical weather procedures," a spokesman said. The facility has two steam crackers with a combined ethylene production capacity of nearly 1.5 million mt/year. The Point Comfort facility is about 90 miles northeast of Corpus Christi. Platts estimates its ethane feedstock consumption at about 100,000 b/d.
* OxyChem suspended operations at its Ingleside, Texas, facility. The company operates a 550,000 mt/year steam cracker at Ingleside, which is about 20 miles northeast of Corpus Christi. The company's partner in the facility is Mexichem. Platts estimates ethane feedstock consumption at the facility at 30,000-40,000 b/d.
* Chevron Phillips Chemical was monitoring Hurricane Harvey's approach to the Texas Gulf Coast on Friday, but a spokeswoman declined to say whether commissioning work at its two new polyethylene plants in Sweeny was affected. The 500,000 mt/year high density and 500,000 mt/year linear low density plants were mechanically complete in June and are undergoing commissioning with startup expected in October. Sweeny is 25 miles inland from the Port of Freeport, which was shut to all traffic Friday ahead of the storm. Phillips 66 shut operations at its liquefied petroleum gas export terminal in Freeport as well.
* Dow Chemical was shutting down its operations in Seadrift, Texas, which was in the path of Hurricane Harvey's expected landfall, the company said. "The Seadrift manufacturing site has begun implementing plans to safely shut down its operations," spokesman Jarrod Erpelding said in an email. He said Dow's other Texas and Louisiana sites remained operational. The Seadrift facility produces polyethylene, glycols and oxide derivatives. It has eight production units. Seadrift is between Corpus Christi and Port O'Connor in the middle of the Texas Gulf Coast, west of the area between Port O'Connor and Matagorda where forecasters expect Harvey to make landfall late Friday or early Saturday.
* There were outages Friday at LyondellBasell's Corpus Christi cracker (over 1.1 million mt/year of ethylene production capacity), Formosa's Point Comfort cracker complex (just below 1.5 million mt/year of capacity), and Occidental's Ingleside cracker (production capacity of 550,000 mt/year). The combined ethane demand for the plants is 80,000-90,000 b/d, based on the most recent data from Jacobs Consultancy's Hodson Report. "LyondellBasell is implementing our very detailed hurricane preparedness plans," company spokeswoman Chevalier Gray said. "While these plans vary from site to site, they are designed to mitigate the impacts of storms like Hurricane Harvey, including flooding. Out of an abundance of caution, we are conducting a controlled shutdown at our Corpus Christi site." The Corpus Christi complex produces ethylene, propylene and other petrochemical products.BIOFUELS
* Hurricane Harvey is expected to have a muted effect on US Gulf Coast ethanol and biodiesel prices, sources said Friday, though the impending storm had many out of the office seeking safety. "All the traders in biodiesel in Houston are off the desk as of this afternoon, battening down the hatches," one biodiesel source said. With most production in ethanol located in the Midwest and biodiesel distributed across the country, output is unlikely to suffer a hit from the storm. As most of the market for ethanol in Texas is for blending or export, sources expected few impacts. Some refineries along the US Gulf Coast began shutting down in advance of the storm; with less production in the region, blending at racks is likely to slow in the coming days, leading to lower ethanol demand.
