On Wednesday, the largest oil refinery in the U.S. started to shut down as Tropical Storm Harvey continues to batter the coastal areas of southern Texas and made landfall yet again threatening a stretch of Louisiana’s refining hub.
Market analysts in the oil industry projected that close to 20% of the capacity in the U.S. to refine crude into gas, diesel and other types of fuels was offline Wednesday.
There were reports of refineries having serious damage on Tuesday. However, continued rain and flooding left it unclear when workers could once again reach the facilities.
Closures of major refineries in the Port Arthur and Beaumont area that is north of Houston took more refining capacity offline in the U.S.
That area is home to close to 8.5% of all refining capacity in the U.S. and had heavy rainfall on Tuesday that caused extensive flooding.
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 refinery, with a capacity of 600,000 barrels per day, is the largest in the U.S.
Exxon Mobil closed its Beaumont refinery that has a capacity of 363,000 barrels per day, while Total and Valero were suspending operations as well in the same area.
One expert in the industry said that if damages were extensive at some of the refineries then they could be off line up to eight weeks in the Beaumont and Port Arthur area.
The area of Lake Charles, Louisiana is expecting severe flooding from Harvey as it made landfall on the border between Louisiana and Texas early Wednesday. In Lake Charles alone, over 4% of the refining capacity in the U.S. has operations.
Phillips 66 and Citgo both were still operating their facilities in Lake Charles, but with reduced capacities, while the Calcasieu refiners in Lake Charles were shuttered.
Refineries in some area of Texas hit hard by Harvey were trying to start up though problems with restoring power were delaying their efforts.
Citgo and Valero said they were trying to restart their operations at Corpus Christi close to where Harvey made landfall on Friday.
Plants in Houston appeared to have suffered only minimal damage, but were not producing much due to access being limited to crude. The area is capable of 2.7 million barrels being refined daily or 14% of the total capacity in the U.S.