Gulf Coast Industries Anxious as Tropical Storm Edouard Targets Southwest Louisiana and Southeast Texas

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Researched by Industrial Info Resources (Sugar Land, Texas)--As of late Monday, most petroleum refineries and petrochemical plants along the Louisiana and Texas coast of the Gulf of Mexico were cautiously watching Tropical Storm Edouard, which formed suddenly over the past 48 hours, leaving little time for companies to implement evacuation and shutdown procedures. The general consensus is that the storm will be minor, but experience merits a cautious approach over the next 24 hours, as conditions could change.

The storm had sustained winds of 45-50 miles per hour and is set to make landfall near Galveston, Texas, on Tuesday. A Hurricane Watch remains in effect from the western part of Intracoastal City, Louisiana, to Port O'Connor, Texas. Rain accumulation of 3-5 inches and isolated maximum amounts of 10 inches are forecast. Most offshore rigs that had time to be evacuated were doing so on Monday. The only refinery in the region that has shut down is the 72,000-barrel-per-day (BBL/d) Marathon refinery in Texas City, Texas. Others, including Valero Energy (NYSE:VLO) (San Antonio, Texas), which operates refineries in Houston and Texas City, have curtailed production and will work with skeleton crews Tuesday.

The Houston Ship Channel closed to traffic on Monday and is not expected to resume operation until Wednesday evening at the earliest. Refiners that are dependent on crude oil imports to run refineries could be further impacted if the Houston Ship Channel stays closed beyond Wednesday. The U.S. imports about 10 million BBL/d, with the Port of Houston accounting for almost 10% of that.

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