The impact of Hurricane Harvey on petcoke markets could be tighter supply in the weeks and possibly months ahead as refinery and terminal operations get back up to speed, sources said Tuesday.
Harvey is expected to shut an estimated 2.4 million-3.4 million b/d of Texas refining capacity, S&P Global Platts estimates, and one petcoke trader said up to 500,000 mt of petcoke production could be lost.
Lost refining capacity is not expected to disrupt petcoke markets as much as the loss of terminal and shipping channels, a second petcoke source said.
"The biggest risk is petcoke not moving," the source said. "I don't think [the loss of refining capacity] will have as big an impact on the market as a whole."
The source noted that several petcoke trading companies have already talked about delaying cargoes.
The source said Kinder Morgan's force majeure declaration at Houston Bulk Terminal over the weekend, which came as the Houston Ship Channel is to operate under port condition Zulu at least through Thursday, possibly later.
Port condition Zulu closes ports to all vessel traffic, when gale-force winds are expected to arrive within 12 hours.
"This port closure has an immediate impact on our Houston Bulk Terminal facility, as vessels scheduled to transit to our berth to conduct loading operations are unable to do so," the company said in a letter Sunday to petcoke customers. "In addition, this closure will likely result in a backlog of vessels scheduled to load at our facility."
Kinder Morgan spokeswoman Lexey Long said in an email Tuesday their Houston and Port Arthur facilities are manned and secured and they anticipate being able to resume operations once the ports open.
Additional impacts could be felt as the storm heads east toward other refineries in Texas and Louisiana. Late Monday, the US Coast Guard set port condition Zulu for Louisiana port Lake Charles and Texas ports Beaumont, Nederland, Orange, Port Arthur, Port Neches, Sabine and Sabine Bar.
