Houston-based power companies adapt to COVID-19

The global COVID-19 pandemic has forced many companies in Houston to adapt their operations to keep their employees and customers safe.

And while an order from Harris County Judge Lina Hidalgo tells members of the public to stay in their homes, the energy industry is among those sectors exempt from the order. While in many cases Houston’s energy employees are able to perform their jobs remotely from the safety of their living rooms, sometimes the work has to be done in person. Here’s how two of Houston’s largest power companies are tackling the problem, both in the office and in the field.

NRG

Houston- and New Jersey-based based NRG Energy Inc. (NYSE: NRG) first started monitoring COVID-19 in January, and it ramped up preparations for things to get tougher in February, expanding the company’s ability to have its employees work remotely, said Elizabeth Killinger, president of NRG’s retail arm, Reliant Energy.

Killinger started encouraging her team to work from home during the week that ended March 13, she said. Then the company made the call to close its facilities around the country on March 17, allowing only critical staff to work in person, Killinger said.

NRG still has employees ensuring that its power plants continue to operate, Killinger said.

The company has also ramped up its cleaning efforts at its sites, and some of the critical staff who can’t work remotely are working in shifts to reduce contact that could spread infection, Killinger said.

“We have groups of employees that don’t cross paths — so they don’t cross pollenate — to minimize the number of people working together at any given time,” Killinger said.

The company is still expanding its telework capabilities, which will allow more employees to work remotely, Killinger said. However, the company is near its teleworking goal right now, she said.

“We are largely there,” Killinger said. “There really isn’t much more of an increased state of teleworking we would do.”

Right now, the company is looking to keep its facilities closed until April 3.

“Only if you are working in a critical, pre-approved role will you be coming into the office,” Killinger said.

CenterPoint

Houston-based CenterPoint Energy Inc. (NYSE: CNP) employees who are able to work from home are doing so, which means a lot of the office staff is now working remotely.

The company has also taken steps to protect its field technicians — it has arranged for them to start their days from home rather than in a central location, and the company is making sure they are supplied with proper protective equipment, said Jim Francis, CenterPoint’s vice president of safety and training. Francis is CenterPoint’s incident commander for its COVID-19 response.

CenterPoint has also started gathering info from its customers ahead of dispatching workers to their homes, Francis said.

“There’s a couple of questions that we ask customers just to make sure we understand their health situation,” Francis said. “Is anyone feeling ill? Have they traveled to areas that maybe have been more compromised with the coronavirus? Just to make sure our folks are as informed as possible so we can assess the risk of that particular service call.”

CenterPoint’s senior vice president of natural gas operations, Steve Greenly, said customers have been largely understanding of the questions.

“Not only are we concerned for the customer, but also our employees,” Greenly said. “We want to do everything we can to continue to be good stewards.”

By Joshua Mann – Senior Reporter

Courtesy of Houston Business Journal

https://www.bizjournals.com/houston/news/2020/03/24/houston-based-power-companies-adapt-to-covid-19.html

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Analyst: Who’s in trouble — and who’s in bigger trouble — at $20 oil

Houston’s energy companies are being rocked by plunging demand amid the COVID-19 pandemic on one side and supply shocks as OPEC countries gear up to produce more oil on the other.

But some subsectors are better off than others.

The top of that list right now would be oil and gas trading arms backed by physical assets, said Jamie Webster, senior director at the Boston Consulting Group’s Center for Energy Impact.

“This is the sort of volatility that they love,” Webster said. “They can trade around their physical assets, combining them with financial instruments to offset some of the losses from the upstream or downstream parts of the organization.”

Refineries have seen their margins crushed by the plunging demand for the products they produce, but the declining crude prices have given them some amount of breathing room, Webster said. That means that if something changes on the demand side and refineries can find buyers for their product, things could turn around for them fairly quickly, he said.

“They could end up having a fantastic second half of the year,” Webster said.

The oil field services sector, which was already in a tight spot due to tightening upstream capital expenditure budgets even before the rapid changes that came earlier this month, could have an especially tough time ahead. That’s particularly true of companies associated with exploration — seismic companies, for example, Webster said.

“What we saw in 2014, and I expect to see it now, is that you want to cut where you can, where you have degrees of freedom to move. You want to cut things like exploration, where they’re way out there, and you aren’t going to be getting volumes online any time soon,” Webster said.

Early analysis indicates that capital expenditures among upstream producers could end up cut by 40 percent of the initial guidance at the start of the year, Webster said.

West Texas Intermediate crude oil futures reached down into the mid- to low-$20s per barrel on March 18 and 19, following a rapid decline into the low $30s and high $20s in the week prior. Social distancing as a response to the pandemic and the OPEC activity are poised to create a supply and demand imbalance that would double the worst quarter in the post-2014 oil price downturn.

 

By Joshua Mann – Senior Reporter

Courtesy of Houston Business Journal

https://www.bizjournals.com/houston/news/2020/03/20/analyst-whos-in-trouble-and-whos-in-bigger-trouble.html

 

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We Are Here For Our Customers

IPS is a service company that just happens to work in the petrochemical industry, but bottom line, we exist to meet the service needs of our customers. Our industry is vital to our nation’s ability to function. We are proud to serve in a roll that contributes to her needs. Throughout this time of uncertainty, we will continue to make the necessary precautions and hygienic steps in order to insure that our crews are available to perform for our customers on stand alone projects role, augments to current staff, or as subcontracted labor.

We offer Millwright and Field Services, our Pump Repair & Replacement Program, Vibration Analysis, a Full Machine Shop, and our Mechanical Seal Repair & Replacement Program. We await your call to provide service for you now in this moment where many folks are shorthanded as well as at any time in the future.

 

Slainte,

 

 

Seth Alford

IPS

https://www.linkedin.com/in/sethalford/

713-703-2179

www.IPSPumpService.com

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Halliburton furloughs Houston employees; other energy cos. working from home

Some of the biggest energy companies in Houston are making changes to when and where some employees work amid the coronavirus pandemic and drop in oil prices.

Halliburton Co. (NYSE: HAL) will furlough about 3,500 Houston employees for 60 days, according to Reuters and other reports. Furloughed employees will alternate working one week and being off the next. They won’t be paid for the time off but will keep their benefits.

The furlough is intended to help the oil field services giant reduce costs as many oil companies cut spending after oil prices plunged down below $30 per barrel on March 9, when the first shots in an oil price fight between Saudi Arabia and Russia put downward pressure on the supply side. At the same time, the coronavirus pandemic has been creating concerns on the demand side of the market, cutting into consumption as consumers taper off air and road travel.

Separately, Kinder Morgan Inc. (NYSE: KMI) ordered employees nationwide to work from home this week in light of the pandemic, the Houston Chronicle reports. The midstream giant won’t reduce operations, but it is restricting employees’ travel and will reevaluate the telecommuting order on a week-by-week basis.

Canada-based midstream giant Enbridge Inc. (NYSE: ENB), which also has a significant presence in Houston, has also ordered employees to work from home, the Chronicle reports. The order affects employees company wide, except for field workers. Large group meetings are canceled, and business travel is limited.

All three companies made the Houston Business Journal’s 2019 Largest Houston-Area Energy Employers List, which published in October. Halliburton was No. 13 with 4,217 local, full-time employees, Kinder Morgan was No. 16 with 2,207, and Enbridge was No. 21 with 1,027

 

By Olivia Pulsinelli – Assistant Managing Editor

Courtesy of Houston Business Journal

https://www.bizjournals.com/houston/news/2020/03/18/halliburton-furloughs-houston-employees-other.html

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Kinder Morgan on target for Texas pipeline construction

Houston-based Kinder Morgan Inc. (NYSE: KMI) has started construction on Permian Highway Pipeline, a long-haul natural gas pipeline from the Permian Basin to the Gulf Coast.

And despite a court case, the projected in-service date for the pipeline is still early 2021, said Dax Sanders, Kinder Morgan’s executive vice president and chief strategy officer. Sanders was speaking at Credit Suisse’s 25th Annual energy Summit on March 4.

The company had faced legal opposition when the city of Austin, city of San Marcos and others asked the U.S. District Court for the Western District of Texas to stop Kinder Morgan from moving forward on the project. Opponents said in their initial complaint filed with the court that the project threatened the habitat of endangered species, including the golden cheek warbler.

The plaintiffs asked the court to issue a temporary restraining order on the project, but the court declined to do so on Feb. 14, according to court documents.

That cleared the way for Kinder Morgan to begin construction. Sanders is confident the project will proceed as expected. The company had already pushed back the start date for the asset from the fourth quarter of 2020 as of its third-quarter conference call with investors in 2019.

Although the company is moving forward on Permian Highway, it still has not yet secured customers for another pipeline project — Permian Pass — and it won’t make a commitment to do so until it has contractual support, Sanders said.

Kinder Morgan produced $13.21 billion in 2019 revenue, which translated to a net income of $2.24 billion. The company employed 11,086 people full time at the start of 2020, up slightly from 11,012 a year prior, according to Kinder Morgan’s two most recent annual financial reports.

 

By Joshua Mann – Senior Reporter

Courtesy of Houston Business Journal

https://www.bizjournals.com/houston/news/2020/03/05/kinder-morgan-on-target-for-texas-pipeline.html

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Offshore terminal planned with Phillips 66, ending dispute between Corpus, Trafigura

Houston-based Phillips 66 (NYSE: PSX) and Singapore-based Trafigura Group Pte. Ltd announced a joint venture Feb. 28 to build a terminal capable of loading very large crude carriers off the coast of Corpus Christi, Texas.

The two companies are awaiting permitting for the project, known as Bluewater Texas Terminal LLC, and plan to make a final investment decision later this year. Bluewater will consist of up to two single-point mooring buoys capable of loading VLCCs — massive oil tankers that can carry 2 million barrels per trip.

The project replaces a previous proposition by Trafigura to build a single mooring buoy under a venture called Texas Gulf Coast Terminals. On Feb. 28, Trafigura announced that it had withdrawn its application with United States Maritime Administration to permit that project, which would have been near the Padre Island National Seashore.

The Bluewater buoys will be placed 21 nautical miles, or 24 land miles, from the Port of Corpus Christi, according to the companies. It will sit farther out north to sea than the previously proposed Trafigura project.

The new location is one of the reasons that the Port of Corpus Christi is throwing its support behind the Bluewater project despite its objections to Trafigura’s discontinued Texas Gulf Coast terminal, port CEO Sean Strawbridge told the Business Journal. Sitting the buoys further offshore will help protect Corpus from emissions, he said.

The port was also happy with Phillips 66’s inclusion in the new project as the company has for decades run a similar crude terminal off the east coast of England.

“I’ve been there along with some board to see it and have them explain it to us,” Strawbridge said. “We got a better understanding and a higher level of comfort for what they are and how they’re operated speaks volumes to [Phillips’] ability to do this safely and responsibly.”

Although the terms of the contract are still being hammered out, Bluewater has agreed to lease land from the port to place a booster station for the offshore terminal, according to Strawbridge. That means money going back to the community, whereas the old Trafigura project wasn’t planning on leasing land on from the port.

The land being leased for the Bluewater booster station is on Harbor Island, the site of another proposed VLCC docking station.

Homeowners in Port Aransas have pushed back against construction on Harbor Island, which is separated from Port Aransas by the same waterway the port wants to dredge for the VLCC terminal.

By Jessica Corso – Reporter

Courtesy of Houston Business Journal

https://www.bizjournals.com/houston/news/2020/02/28/offshore-terminal-planned-with-phillips-66-ending.html

 

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