The largest U.S. fuel pipeline shut down on Sept. 14 due to power outages caused by Nicholas, which made landfall as a hurricane before weakening, the second U.S. Gulf storm in as many weeks.
Rains, flooding and power outages were affecting Texas and Louisiana, which were still trying to recover from Hurricane Ida, which knocked most U.S. Gulf offshore oil and gas production offline. Power outages in the Houston area caused Colonial to pre-emptively shut down its main gasoline and distillate fuel lines, the company said in a notice to shippers.
Nicholas was about 10 miles (15 km) southeast of Houston by 10 a.m. Central Time (1400 GMT), heading northeast with maximum sustained winds of 45 miles per hour (75 km per hour), the National Hurricane Center (NHC) said in a bulletin.
The storm caused widespread power outages as it crossed over the Houston metropolitan area late Sept. 13 and early Sept. 14. About 485,000 customers were without power in Texas.
Colonial supplies roughly 2.5 million bbl/d of refined products to some of the busiest U.S. fuel markets, mostly in the Southeast and East Coast. The line also shut during Ida, but was restarted without incident a few days after the storm landed.
More than 40% of the U.S. Gulf of Mexico’s oil and gas output remained offline on Sept. 13, two weeks after Hurricane Ida slammed into the Louisiana coast, according to offshore regulator Bureau of Safety and Environmental Enforcement (BSEE).
Shell, which saw significant damage to facilities in Louisiana, said it shut production at its Perdido oil platform on Sept. 13 due to heavy winds, and was ready to restart once a downstream facility operated by a third party restored power. The company had no plans to return staff to the facility on Sept. 14.
Some 14 inches of rain fell in Galveston while Houston got almost six inches overnight and into the morning, the National Weather Service reported. Nicholas, which landed in Texas, had a much less pronounced effect than Ida on Gulf Coast refining capacity.
Most Texas refiners were operating on Tuesday. Motiva Enterprises’ 607,000 bbl/d Port Arthur, Texas refinery—the largest in the United States—was operating normally as Nicholas was passing over the area on Sept. 14, said sources familiar with plant operations.
Royal Dutch Shell Plc’s 302,800 bbl/d joint-venture Deer Park, Texas refinery was also operating normally on Sept. 14, as was Exxon Mobil’s Baytown and Beaumont refineries.
Texas energy company CenterPoint Energy Inc. said on Sept. 14 that about 400,000 homes and businesses in its Houston-area service territory were without power.
Vessel traffic was idled early on Sept. 14 at the Houston Ship Channel and the Calcasieu Ship Channel. The ports of Houston, Freeport, Galveston and Texas City were open with restrictions, however, according to the U.S. Coast Guard.
Some shippers expect the restrictions set by Texas and Louisiana ports while Nicholas passes through will add to ongoing import and export delays from Ida.
The investment bank said key oil products markets are showing "steep backwardation and inventories that have fallen to low levels."
Arkansas, Louisiana, Mississippi and Texas RRC Dist. 1, 2, 3, 4., 5, 6, inland, offshore
June 2021: Brinninstool West Field-Wolfcamp Well: 5,453 bbl of Oil, 9.779 MMcf of Gas per Day