The sudden arrival and widespread impact of Tropical Storm Imelda took a significant toll on the regional oil supply chain this month, affecting refinery operations, crude oil storage and crude oil pipeline flows.
Imelda quickly formed off the coast of Texas and made initial landfall in southeast Texas September 17 as a tropical depression and continued to pummel the region with heavy rainfall in the following days. Although never classified as a hurricane, the effects of this deadly storm were severe. Imelda is now on record as the seventh-wettest tropical cyclone in U.S. history, with rainfall totals reaching a high of 43.39 inches near Beaumont, TX, over the course of the storm, according to the National Weather Service (NWS).
Although there are similarities to Hurrican Harvey, the death toll and total rainfall of Imelda are much lower than the 2017 hurricane, which brought up to 60.58 inches of rain to some parts of the region, according to NWS. Houston officials have claimed the flooding impacts of Imelda were more severe in some areas compared to Harvey. Due to this, cyclones currently developing in the Atlantic basin are cause for concern as more rainfall could potentially hit areas that have yet to recover from previous storms.
Crude deliveries via pipeline slowed significantly last week as several lines into Houston and Beaumont-Nederland, TX, shut for a period of time between September 17 to 19 according to our data. Lines into Houston that shut included Magellan's 440,000 barrels per day Colorado City, TX,-to-Houston BridgeTex pipeline, Magellan's 275,000 bpd Crane, TX,-to-Houston Longhorn pipeline, Enterprise's 1.3mn bpd Sealy, TX,-to-Houston Rancho II pipeline, Enterprise's 400,000 bpd Cushing, OK,-to-Freeport, TX, Seaway pipeline, and the 550,000 bpd Seaway Twin pipeline. Flows on Seaway Twin averaged 263,000 bpd lower than the previous week for week ending September 20, as the pipeline shut September 17 and did not recover to pre-storm rates until September 20. Overall weekly pipeline flows into Houston dropped 418,000 bpd for week ending September 20, to a total average of 2.51mn bpd.
Flows into Beaumont-Nederland along both pipelines we monitor also averaged lower week-on-week amid the severe weather. Energy Transfer Partners' 570,000 bpd Patoka, IL, -to-Nederland Crude Oil pipeline (ETCOP) were down an average of 25,000 bpd as the line was shut for intermittent periods between September 18 and 21. The largest impact to Beaumont-Nederland pipeline deliveries came with the shutdown of TC Energy's 750,000 bpd Cushing-to-Nederland Marketlink pipeline, which shut September 19 and 20 due to flooding, according to Reuters. Average incoming pipeline flows to the region decreased 225,000 bpd for week ending September 20, dipping to 1mn bpd.
Shuttered pipeline flows contributed to inventory draws across the region. The most notable impact was to storage volumes in Houston, where stocks declined 2.102mn bbls last week to a total of 34.302mn bbls, the lowest level since September 2018. Capacity utilization in the region dropped nearly six percentage points to 39 percent overall. Beaumont-Nederland stocks dipped to 49 percent utilization, drawing 529,000 bbls to 27.135mn bbls across all locations, the lowest level since August 2018. The lower pipeline flows into the Gulf Coast lead to significant storage builds at the hub in Cushing. Stocks climbed 2.816mn bbls to 42.819mn bbls, reaching the highest level in five weeks.
Multiple refineries in southeast Texas experienced brief operational disruptions and flaring during Imelda. We observed elevated flaring in the Houston area at Exxon's 584,000 bpd Baytown, TX, refinery and Marathon's 450,000 bpd Galveston, TX, refinery the morning of September 17, though we did not observe any changes to unit status at these facilities or any other refinery in Houston during the storm. In Beaumont-Nederland, the 75,000 bpd crude section at Valero's 395,000 bpd Port Arthur, TX, refinery shut from September 19 to 23. At Exxon's 350,000 bpd Beaumont refinery, the larger, 240,000 bpd crude distillation unit was offline September 19 through 22. Units at the refinery were shut due to flooding, according to Reuters. Subscribers to our North American Refinery Intelligence Report receive the most extensive view into refinery unit operations in North America, especially during storms. To find out more about our intel or to request a demo, please click here.