INSIGHT INTERACTIVE: Persistence of Hurricane Harvey impact of deep concern

Author: Nigel Davis


By Nigel Davis

Hurricane Harvey rainfall update 29 August

(Re-casts clarifying ranking of ExxonMobil's chemicals operations and number of LNG vessels loading at Sabine Pass in August))

LONDON (ICIS)--Catastrophic by any use of the word, the persistence of the impact of Hurricane Harvey on the US states of Texas and now Louisiana has to be of deep concern.

The personal impact is spreading with many more citizens affected as the downpours continue and flooding worsens.

The economic impact will be immense given the way in which the storm has hit individual households and businesses and strangled transport infrastructure.

The home to so much US refining and petrochemicals industry, chemicals production and logistics have been hit hard.

Current ICIS capacity tracking data show that more than 61m tonnes of petrochemicals and refined products capacity on the US Gulf Coast is out of action, brought down before Hurricane Harvey hit the Texas coast, during the early part of the storm, or later as flooding became more widespread in the Houston and surrounding area.

The Port of Houston, the major US petrochemicals trading hub, has been closed. Very large refining and petrochemical complexes along the coast and further inland have been temporarily shut.

ICIS live supply disruption data, collected since 21 August, before the storm made landfall, show close to 11.1m tonnes of ethylene capacity out of action because of Harvey. This is about 55% of Texas ethylene capacity with the shutdowns concentrated around Houston. It is 37% of total US ethylene capacity.

Major producers around the fourth largest city in the US have closed plants.

ExxonMobil and Shell closed refineries and chemical facilities. Other producers have found themselves in similar situations.

Crackers are out of action in Baytown, Deer Park, Freeport, Corpus Christi, Port Arthur, Point Comfort and Ingleside because of the storm.

The ICIS data show about 5m tonnes of propylene capacity down (23%) and 4.2m tonnes of polyethylene (26%), 2.0m tonnes of polypropylene (25%) and 2.8m tonnes of benzene (31%) closed at multiple locations. The percentage of total US capacity is shown in brackets.

Click here for an interactive graphic that shows details of the products and companies affected at each location. Hover over the location to drill down into the data and use the drop down menu to see individual products affected.

Clearly, the primary focus of companies has to be their employees and others associated with their operations. Getting to and from a place of work is nigh on impossible in the greater Houston area and freeways and ramps that would normally be clogged with vehicles remain empty, if not submerged, in many cases under metres of water.

Pledges of relief have already been made. Dow Chemical, for instance, said it had accounted for its workers and crackers in Texas after Hurricane Harvey and had pledged $1m to support immediate relief and longer-term recovery efforts.

ExxonMobil said it was communicating with its employees and their families to ensure they remain safe. Extreme flooding had led to “operational issues” at its Texas facilities, the third largest US petrochemicals producer added.

Most of the operations at the giant Baytown, Texas, refinery and petrochemical complex had been shutdown while the Beaumont, Texas, refinery had reduced rates. Facilities at Baton Rouge in Louisiana were operating as normal, it said.

The US National Hurricane Center in its forecast timed at 07:00 Central Daylight Time on Tuesday showed the storm moving east northeast at just 3 miles per hour (4.8 kilometres per hour) and the likelihood of still significant rainfall across a wide area over the next few days.

Hurricane Harvey forecast 29 August

The pressure on transport infrastructure, particularly, is likely to remain significant making it difficult to bring production facilities back up and to move personnel and product to and from production locations.

Petrochemical facilities can be idled relatively easily and, as long as they are not shut down completely, brought back on line relatively swiftly. Some firms have already announced possible re-start dates.

The impact of Harvey is likely to be felt over many weeks, rather than days, however, once the clear up begins.

And the storm’s impact is not limited to refining and petrochemicals.

Exports of feedstocks such as ethane and petrochemicals such as ethylene from the Houston are likely to have been affected alongside domestic chemicals supply potentially leading to logistics issues for far flung petrochemical operators over the coming weeks. It has not been possible to confirm any potential impact at the time of writing.

ICIS data for liquefied natural gas (LNG) show that LNG production from Sabine Pass has continued unaffected in recent days but that no ships have loaded since Thursday 24 August.

According to ICIS LNG edge, two LNG vessels were near the Sabine Pass terminal on Tuesday but not in a position to load. A total of 13 vessels had loaded so far in August.