TC Energy shuts oil line as flooding disrupts U.S. Gulf terminals
TC Energy Corp’s Marketlink oil pipeline from Cushing, Oklahoma, to Nederland, Texas, was shut as flooding disrupted operations at U.S. Gulf Coast terminals, traders familiar with the matter said.
Dangerous flash floods inundated parts of southeastern Texas on Thursday as Tropical Depression Imelda dumped the last of its rains, with the National Hurricane Center predicting rain totals up to 35 inches (89 cm) in some coastal areas.
Energy Transfer LP’s Nederland terminal, located between Beaumont and Port Arthur, was also shut briefly on Thursday.
The terminal had a power outage earlier in the day but it had since been restored and operations have returned to normal, Vicki Granado, a spokeswoman for Energy Transfer said in an email.
The 750,000 barrel-per-day (bpd) Marketlink pipeline connects to the Nederland terminal, market sources said, forcing the line to be shut. The restart of the terminal would likely speed up the restart of the pipeline, traders said.
TC Energy did not respond to a request for comment.
The closure of the pipeline weakened prices at Cushing, with front-month U.S. crude futures widening to as much as 10 cents a barrel discount to the second month, on expectations that barrels will be backed up at the storage hub.
Cushing is the delivery point for benchmark U.S. crude futures and inventories there have dropped for 11 weeks in a row through Sept. 13. [EIA/S]
Phillips 66 also shut operations at its Beaumont Terminal in Nederland, Texas, as a safety precaution due to flooding.
The outages are likely to disrupt loadings out of the Gulf Coast and weigh on crude exports, which have surged to weekly records above 3 million bpd this year, traders said.
Exxon Mobil Corp (XOM.N) shut its 369,024 bpd Beaumont, Texas, crude oil refinery on Thursday because of flooding from Imelda, sources familiar with plant operations said.
Other refineries in southeast Texas cut back production as heavy rain continued to fall for a second day from Houston to western Louisiana.
Reporting by Devika Krishna Kumar and Laila Kearney in New York; Editing by Nick Zieminski and Marguerita Choy
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