Friday, March 5th, 2021
Oil refinery
The Motiva Enterprises refinery in Port Arthur, Texas, in 2020. Photographer: Callaghan O'Hare/Bloomberg
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Biggest U.S. Oil Refineries Closing Because of Frigid Air


Motiva, Exxon, Marathon halting some fuel production in Texas |  Gasoline futures jump as closures signal tightening supplies

By Jeffrey Bair and Barbara J Powell for Bloomberg – The largest oil refineries in North America are shutting down because of Arctic conditions that have disrupted power, water and fuel supplies across Texas.

More than 3 million barrels of daily oil-processing capacity has been idled in the wake of record-setting cold, according to consultant Energy Aspects Ltd. The shutdowns portend tightening supplies and higher prices for everything from gasoline to propane in coming days and weeks in cities across the country that rely on the U.S. Gulf Coast for fuels.

Saudi Aramco’s Motiva Enterprises LLC is halting operations at its Port Arthur, Texas, refinery, the nation’s largest, according to an email from the company. South of Houston near Galveston Bay, Marathon Petroleum Corp. shut its plant in response to the chill, Reuters reported.

Meanwhile, Exxon Mobil Corp. shut its massive Baytown refinery near Houston, as well as some units at its refinery in the town of Beaumont about 70 miles (112 kilometers) to the east, spokeswoman Sarah Nordin said. In addition to the cold, the Beaumont closure was also driven by a shortage of natural gas.

Total SE ratcheted down crude processing to minimal levels and shut a key refining unit at its Port Arthur, Texas, plant, a person familiar with operations said. The refinery probably will shut completely within hours as temperatures drop, the person said.

Gasoline futures rose 3.5% to $1.75 a gallon on the new York Mercantile Exchange on Monday.

Oil pipelines, electricity generators and wind farms have been paralyzed by record-setting cold in the nation’s top crude-producing state. Refinery capacity is shrinking at a faster pace than crude production is declining due to the Arctic weather, according to Energy Aspects.

“Disruptions to refining operations could be prolonged if the cold damages any equipment or if the power outages affecting Texas are not resolved quickly,” the consultant said in a note to clients.

— With assistance by Sheela Tobben, and Javier Blas

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