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Energy Operations Calm After the Storm

August 5, 2008

By Brett Clanton and Tom Fowler Houston Chronicle, Houston Chronicle

Aug. 5–Oil and gas companies and chemical makers said Tropical Storm Edouard had little or no impact on facilities, with most making plans to return to normal operations by Wednesday.

Dow Chemical Co. plants in La Porte and Clear Lake, which closed ahead of the storm, plan to resume production tonight, said Gina Foster-Gibbs, a spokeswoman for the Midland, Mich.-based chemical giant.

Marathon Oil Corp’s 72,000 barrel per day plant in Texas City remained closed late today, but may reopen Wednesday, said Angela Graves, spokeswoman for the Houston-based company.

Valero Energy Corp. refineries in Port Arthur, Texas City and Houston ran at slightly reduced rates as the storm passed, but were resuming normal production late this afternoon, the company said in an e-mail to reporters.

Motiva Enterprises Port Arthur Refinery reported temporary power problems as the storm made landfall this morning but was largely unaffected, Shell said in a statement. Motiva is a joint venture of Royal Dutch Shell and Saudi Arabia’s state oil company.

Sharon H. Rogers, spokeswoman for German chemical giant BASF, said the storm had a minimal effect on company plants in Beaumont and Port Arthur and did not affect facilities in Freeport, Clear Lake, and Pasadena. She said non-essential personnel did not report to work this morning, but that the company plans to resume normal work schedules later today and Wednesday.

Cheniere Energy’s Sabine Pass liquefied natural gas terminal on the Lousiana side of Sabine Pass came through the storm undamaged and was back up and running this afternoon.

The terminal, which opened earlier this year, was shut down Monday but an assessment team was on site by 8 a.m. The facility has its own power generation so outages in nearby Port Arthur had no impact.

“It was built to withstand a Category 4 hurricane, so there were no problems,” said Cheniere spokeswoman Christina Cavarretta.

There were no tankers at the terminal at the time of the storm.

Elsewhere, oil companies with oil and natural gas production facilities and in the central and western Gulf of Mexico, as well as offshore drillers, indicated the worst had passed.

BP, in a recorded message, said it was returning its offshore operations to normal.

Shell Oil said the storm had no impact on its platforms and will begin today returning the few workers it evacuated, weather permitting.

And offshore driller Noble Corp. said workers that were evacuated Monday from two submersible rigs in the Gulf may return by midday Wednesday.

Wall Street continued to treat the tropical storm with indifference as Edouard spared vital oil and gas operations.

Light, sweet crude for September delivery fell $2.24 to settle at $119.17 a barrel on the New York Mercantile Exchange, after dipping earlier to $118, the lowest level since May 5.

Natural gas futures fell 5.8 cents to $8.668 per 1,000 cubic feet. On Monday, natural gas plunged 66.3 cents to $8.726, its lowest level in nearly six months.

Given the mostly upbeat storm reports, several companies were planning to return to normal staffing levels by Wednesday after telling non-essential and some administrative workers to stay home today.

Shell’s Deer Park refinery and chemical plant was running normally this morning, said spokesman David McKinney. One of the chemical process units had an upset early this morning that led to some flaring, but it was unrelated to the storm, he said.

Meanwhile, gasoline distributors said there were relatively few problems delivering fuel to gas stations in the area, although a few stations ran out for brief periods on Monday, said Brooks Smith, vice president of Bay Oil Inc. in Dickinson.

“Most of those outages were at stations that had a big weekend and then sold so much Monday morning before their regular deliveries showed up,” said Smith.

Business at the terminals where tanker trucks fill up with gasoline for delivery to stations was brisk on Monday, but Smith said the refiners that operate those sites did a good job of keeping traffic moving quickly.

Bill Tilger, operations manager for fuel wholesaler Sun Coast Resources, said operations were running smoothly and that even in Beaumont, where the storm is hitting the hardest, his drivers are reporting normal deliveries.

brett.clanton@chron.com

tom.fowler@chron.com

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