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Charles Kennedy

Charles Kennedy

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Texas Refinery Restarts Could Take Until April

The restart of Shell’s Deer Park refinery in Texas could take until April, Reuters has reported, citing unnamed sources familiar with the issue.

A spokesman for the company told Reuters no timeline has been set for the refinery’s return to normal operation.

Shell shut down the two crude processing units at the 318,000-bpd refinery in the middle of this month, before the cold spell that hit Texas’ energy industry and shut down several other refineries as well, because of a pump seal malfunction.

Then the Arctic blast hit, and the supermajor shut down the rest of the refinery’s operations. The cold wave shut down more than 6 million bpd in refining capacity in the Lone Star state, according to calculations from IHS Markit. It also took down 4 million barrels in daily oil production capacity.

Exxon is also taking its time in restarting two units at its Baytown refinery, according to a Reuters report citing unnamed sources from the company.

The units concerned are the wastewater unit at the 560,500-barrels-per-day refinery and its sulfur recovery unit.

“Exxon Mobil continues to make progress restarting its Baytown operations,” a company spokesman told Reuters. “As a matter of practice, we do not discuss the operation of individual units.”

The shutdowns led to a surge in flaring: refiners flare gases produced during refining to prevent it from damaging their processing units. According to data from the Texas Commission on Environment Quality, the collective emissions of refineries during the Arctic freeze totaled some 153 tons of gases, including benzene, carbon monoxide, and sulfur dioxide, among others.

The industry is starting to get things back to normal, but it will take a while, especially for refineries that can’t rush the restart of their units.

Motiva, the Saudi refining giant, filed a notification that it was beginning a 17-day restart of operations earlier this week. Marathon Petroleum is restarting its Galveston facility. Valero and Citgo are also restarting their refining plants on the Gulf Coast.

Meanwhile, oil producers are also working to bring wells back online, but some of these will remain idle, according to analysts. Marginal wells may simply prove to not be sufficiently economical to be brought back online.

By Charles Kennedy for Oilprice.com

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