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MOSCOW (MRC) -- Texas energy companies
began preparing to resume oil and gas production after days of frozen shutdowns
as electric power and water service slowly resumed at darkened oilfields and
refineries, said Reuters.
It
will take several days for oilfield crews to deice valves, restart systems and
begin oil and gas production. U.S. Gulf Coast refiners are assessing damage to
facilities. They face five- to seven-day restarts with low water pressure
continuing to hamper operations even as power is being restored, said people
familiar with the matter.
No additional outages were reported overnight,
said the Electric Reliability Council of Texas (ERCOT), which runs the state's
electric grid. It reported sufficient power for morning demand and predicted it
would be out of emergency condition later in the day. Millions of people across
Texas shivered in the dark this week after a severe winter storm laid siege to
the state, with demand for natural gas spiking and supplies needed to power
electric generators and heat homes drying up.
Estimates vary, but the
unusually cold weather in Texas and the Plains states curtailed up to 4 million
barrels per day of crude oil production and 21 billion cubic feet (bcf) of
natural gas, according to analysts. Texas refiners halted about a fifth of the
nation's oil processing amid power outages and severe cold.
Goldman Sachs
analysts estimate a 700,000-bpd average decline in U.S. onshore crude production
in February, excluding Alaska. Only a minority of wells could face troubles
restarting, it said. U.S. Gulf Coast refineries are potentially less prepared
for extremely cold weather than for seasonal storms, Goldman said, creating
risks of "more prolonged refining downtime."
The freeze offs, which can
occur when water in the gas turns to ice, led utilities to call for conservation
measures from California to West Virginia. Ford Motor Co halted production in
Kansas City, Missouri, because of a lack of natural gas. Mexico, which imports
large volumes of natural gas from the United States, experienced blackouts in
northern states bordering Texas, with some factories reporting billions in
losses on limited natural gas supplies from Texas.
Texas on Wednesday
ordered gas producers to halt exports needed by state utilities through Sunday,
sparking Mexico to call the U.S. envoy to press for natural gas supplies.
Pipeline gas exports from the U.S. to Mexico rose to 5.1 bcf on Friday after
dropping to a 13-month low of 3.8 bcf per day on Tuesday, Refinitiv Eikon data
showed.
In the United States, the move did not appear to affect
deliveries to other states. California's power exchange and the MISO, an
exchange that handles 15 U.S. states, both said they had not seen any impact.
More natural gas will soon be flowing. Chevron Corp and ConocoPhillips have
begun restoring shale output, and Chevron will prioritize natural gas
production. Texas oil and gas regulators and a DiamondBack Energy executive also
reported that power was being restored to west Texas, where oil production was
shut by record snowfall and power outages.
"The majority of our Permian
and Eagle Ford volumes remain offline," said Conoco spokeswoman April Andrews,
referring to the two major Texas shale fields. Conoco, the top U.S. independent
oil producer, is ready to bring back full operations across its U.S. operations
outside of Alaska once power and other infrastructure outages end, she said.
As per MRC, a winter
storm has brought unusually cold temperatures, snow, and freezing rain to Texas
and western Louisiana, forcing a large share of US light olefins production
offline. As of the evening of Tuesday, 16 February, IHS Markit had confirmed the
shutdown of at least 61% of US ethylene capacity, 59% of US chemical- and
polymer-grade propylene (CGP, PGP) capacity, and 22% of US fluid catalytic
cracking (FCC) capacity. Many plants that remained online were running at
reduced capacity.
Ethylene and propylene are feedstocks for producing
polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report,
Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2%
year on year. Only shipments of low density polyethylene (LDPE) and high density
polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to
the Russian market reached 1 240,000 tonnes in 2020 (calculated using the
formula: production, minus exports, plus imports, excluding producers'
inventories as of 1 January, 2020). Supply of exclusively PP random copolymer
increased. |
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