Houston energy cos. begin assessing damage to facilities hit by Hurricane Laura

Several energy companies based, or with a significant presence, in the Houston area are beginning to assess the impact Hurricane Laura had on their facilities.

Houston-based Westlake Chemical Corp. (NYSE: WLK) and master limited partnership Westlake Chemical Partners LP (NYSE: WLKP) announced late Thursday, Aug. 27, that initial assessments indicate their facilities in the Lake Charles area incurred limited physical damage. The employees who stayed at the facility during the hurricane are safe.

However, restarting the facilities, which were shut down as a precautionary measure before the storm, “will primarily depend upon the availability of electricity, industrial gases, and other feedstocks,” press releases state.

“We do not expect any material impact to (Westlake Chemical OpCo LP) or to the (MLP) as a result of Hurricane Laura as, pursuant to OpCo’s ethylene sales agreement with affiliates of Westlake Chemical Corp., (Westlake Chemical) is obligated to pay a margin and fixed costs for 95% of OpCo’s budgeted ethylene production, even following a force majeure event,” said Albert Chao, president and CEO of Westlake.

Houston-based Citgo Petroleum Corp., which is majority-owned by Venezuelan oil giant Petróleos de Venezuela SA (PDVSA), reported no safety issues or hydrocarbon releases directly related to Hurricane Laura at its Lake Charles Manufacturing Complex.

However, the refinery suffered damage due to high winds, and a detailed assessment is currently underway but will take several days. The company does not expect an immediate restart but will not issue a schedule until the assessment is complete.

“We are pleased to confirm that all of our employees are safe, and thanks to the advance preparation and hard work of our refinery employees, there wasn’t any flaring or release of hydrocarbons resulting from this ferocious storm,” Citgo President and CEO Carlos Jordá said in an Aug. 28 press release.

Houston-based Phillips 66 (NYSE: PSX) also has yet to determine restart timelines.

“Our response is now focused on ensuring the safety and well-being of our employees,” the company said in an Aug. 28 update. “Facility assessments are underway at all impacted locations and will likely take several days. Timelines for operational restarts are largely dependent on assessment impacts and access to electricity and other utilities in the region.”

The Netherlands-based Royal Dutch Shell PLC (NYSE: RDS.A, RDS.B), which has its Shell Oil Co. arm based in Houston, aimed to begin inspections of its Auger, Enchilada and Salsa assets Aug. 28.

“These inspections will enable us to determine when we can safely re-deploy personnel and resume operations to those platforms,” the company said in a 10 a.m. update. “Meanwhile, we are beginning to re-deploy personnel to all other assets that have not been impacted, including those in the Norphlet and Mars Corridors. Perdido was the only one of our nine operated assets that was not shut it and remains in production. Our drilling operations are in the process of restarting. As always, the safety of our people, the environment and our assets are Shell’s top priority.”

As of Aug. 27, London-based BP PLC (NYSE: BP), which has its U.S. headquarters in Houston, was preparing to inspect its company-operated facilities in the deepwater Gulf of Mexico.

“Production will remain shut-in until we have confirmation that our platforms are able to operate safely, pipeline companies have confirmed the operability of offshore pipelines and the shore-based transportation and receiving systems are working as necessary,” the company said in a statement. “Weather permitting, overflights will begin Friday (Aug. 28) to survey our facilities. At this time, we cannot predict how long this process will take, safety is our top priority as we move forward and determine next steps.”

By Olivia Pulsinelli – Assistant Managing Editor

Courtesy of The Houston Business Journal

https://www.bizjournals.com/houston/news/2020/08/28/energy-facilities-assessing-damage-hurricane-laura.html