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Unexpected Cold Snap in U.S Halts Shale Production

February 12, 2021

A huge deep freeze across the United States is causing havoc across the energy industry in the largest U.S. crude-producing state, halting Texas oil wells and refineries on Monday and forcing restrictions from natural gas and crude pipeline operators.

The deep freeze prompted the state’s electric power suppliers to impose rotating blackouts, leaving almost 3 million homes and businesses without power. U.S. President Joe Biden issued an emergency declaration, unlocking federal assistance to Texas.

Texas produces roughly 4.6 million barrels of oil per day and is home to some of the nation’s top gasoline and diesel producing refineries.In Midland, heart of the West Texas shale region, a record snowfall and temperatures that hit a 32-year low closed offices and businesses.

Oil refiner Motiva Enterprises said it was shutting its 607,000 barrel-per-day Port Arthur, Texas, refinery, the largest in the United States. Valero Energy Corp and Total SE separately moved to shut their 335,000 and 225,000 bpd plants in Port Arthur, Texas, due to Monday’s severe cold.

Exxon Mobil also began shutting its 369,024 bpd Beaumont refinery and 560,500 bpd Baytown refinery and chemical plant in Texas, sources familiar with plant operations said. Its Baton Rouge, Louisiana, plant also suffered operational issues.

Citgo Petroleum Corp said some units at its 167,500 bpd Corpus Christi, Texas, oil refinery were shutting due to weather-related power disruptions. The plant’s crude distillation unit, a reformer and a hydrotreater were shut by cold weather, sources familiar with plant operations said, with all other units also being powered down.

The cold snap forced LyondellBasell’s 263,776 bpd Houston refinery to operate at minimum production and shut most units at Marathon Petroleum’s 585,000 bpd Galveston Bay plant.

Oil pipeline operator Enbridge Inc. said a 585,000 bpd crude oil pipeline that runs from its terminal near Pontiac, Illinois, outside of Chicago, to the largest U.S. oil storage hub in Cushing, Oklahoma, was halted because of power outages. Colonial Pipeline Co, the largest oil products pipeline in the United States, said its system had no significant impacts to operations due to the weather.The icy weather conditions also prompted Port Houston public terminals to cease vessel operations from Sunday evening through Monday.

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