Energy Operations Buckle Down Ahead of Storm
Monday, August 04, 2008 6:52 PM
Symbols: APC, CVX, DOW, DVN, EPD, MRO, VLO, XOM
By Brett Clanton, Tom Fowler and Kristen Hays, Houston Chronicle

Aug. 4--Energy companies with Gulf Coast operations were rushing this morning to prepare for Tropical Storm Edouard after the surprise storm drifted closer to the Texas and Louisiana coastline.

Oil companies including Shell, BP and Chevron said they were evacuating workers from offshore platforms in the western and central Gulf of Mexico but did not expect the moves to affect production.

Oil refiners and chemical producers along the Gulf Coast were seen as being more vulnerable to outages because of the long lead times needed to shut down equipment safely and the threat that strong winds or flooding could knock out production.

The upper Texas coast was under a hurricane watch this afternoon as Edouard plodded closer, with an expected landfall sometime Tuesday as either a tropical storm or a minimal hurricane.

The U.S. Coast Guard said all cargo operations in the Houston-Galveston area will stop at 10 p.m., and pilots already have stopped taking in tankers and ships. The Houston Ship Channel remained open for outbound ships and barge traffic.

As a precaution, Houston's Marathon Oil said it had begun shutting down its 72,000-barrel-per-day refinery in Texas City.

BP's Texas City refinery will send home all non-essential workers this afternoon but does not anticipate a reduction in output from the facility, said spokesman Daren Beaudo. The facility, which has been undergoing repairs and upgrades for several years, is back up to a capacity of about 400,000 barrels per day.

BP's administrative campus in west Houston will close at 4 p.m. today and remain closed Tuesday, Beaudo added.

Dow Chemical also said it shut down plants in Clear Lake and La Porte.

Other companies, however, said they were securing equipment and preparing backup staffing plans but had not decided to close facilities.

"We're just taking the appropriate preliminary procedures," said Prem Nair, spokeswoman for Irving-based Exxon Mobil, which operates the the nation's largest oil refinery in Baytown. "Currently, there are no plans to shut down the refinery."

Shell Oil's Deer Park refinery is mainly taking care of "housekeeping" items this morning, said spokesman David McKinney, such as tying down equipment and evaluating staffing needs.

"At this time, no plans to curtail manufacturing rates or shut down any processing units," McKinney said in an e-mail but the company will continue to evaluate the storm throughout the day.

Officials with Citgo Petroleum, Valero Energy and BP also said they were still monitoring the storm to judge how refineries could be affected.

With the storm approaching, ports in Houston and Texas City were closed, raising the threat that oil shipments could be cut off to refineries in the region. Such a scenario could force refiners to shut down and stunt gasoline output, sending pump prices higher nationwide.


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