About 1 million in Texas without power, Freeport LNG to restart after Beryl

[July 12, 2024]  By Arathy Somasekhar, Curtis Williams and Georgina McCartney

HOUSTON/FREEPORT (Reuters) -About 1 million homes and businesses in Texas remained without power on Thursday, four days after Hurricane Beryl lashed the state with fierce winds and flooding, sparking frustration among companies, officials and residents who were facing extreme heat.

A little more than half of CenterPoint Energy's 2.3 million customers had power restored by Thursday morning, the company said, following Beryl's landfall near Matagorda. CenterPoint is Texas' largest electricity provider.

Hiccups in the restoration of power are slowing down some companies' efforts to return operations to normal, especially around Freeport, among Texas' largest energy hubs. More rain on Thursday added to the delays.

However, most oil and gas companies have resumed normal operations after Beryl made landfall as a Category 1 storm.

Freeport LNG, the U.S. third largest liquefied natural gas (LNG) producer, began pulling in small volumes of natural gas for processing on Thursday, according to data from financial firm LSEG. The company has not provided an operational update since Sunday, when it said it ramped down production.

A small flare could be seen flickering at the facility, according to a Reuters witness.

No vessels were docked at the LNG company's berths, but many power restoration crews were working in the area with service trucks arriving from as far as Nebraska and North Carolina, according to locals interviewed by Reuters.

"The major concern of the week over the impact of Hurricane Beryl on U.S. LNG production has receded," said consultancy Rystad's vice president, Wei Xiong, in a note to clients.

The port of Freeport said restrictions for navigating during daylight could be lifted on Thursday.

U.S. natural gas futures fell about 2% to a two-month low on Thursday on a bigger-than-expected weekly storage build as output rose and the amount of gas flowing to LNG export plants dropped due to Beryl.

Chemical maker Olin on Wednesday declared a force majeure for some product and aromatic shipments after Beryl caused damage to its Freeport facilities. The firm said the duration of the disruption was uncertain, and did not respond to requests for more details.

Formosa Plastics, which temporarily shut down operations at its Point Comfort plant after a malfunction with a gas compressor system, said it did not receive any severe damage from Beryl. The company expects operations to be back to normal by the end of next week.

Chemical company BASF said its facilities in Texas experienced minimal impact from Hurricane Beryl and the site was working to resume normal operations.

The ports of Houston, Galveston and Texas City were open on Thursday, with some of them operating with restrictions that were expected to be lifted soon. The U.S. Coast Guard on Thursday afternoon rescinded port conditions issued during storms, signaling normal operations.

Marguerite Thomas lights candles at dusk after losing electricity due to Hurricane Beryl in Surfside Beach, Texas, U.S., July 9, 2024. REUTERS/Adrees Latif/File Photo

The Texas Gulf Coast is home to massive oil and gas processing facilities, as well as export plants and chemical manufacturers. Texas accounts for 40% of U.S. oil output and 20% of the country's natural gas production.

Refineries, offshore production sites and ports saw limited damage and had largely returned to normal operations by Thursday.

BACKLASH

CenterPoint has been facing scrutiny over its preparations ahead of Beryl and speed of reaction.

The utility said on Wednesday it expected to restore power to an additional 400,000 customers by Friday and 350,000 customers by Sunday. In total, 2.26 million of its customers lost power in the storm.

"We did not have material damage to our transmission system or substations or flooding of substations," CenterPoint executive vice president, Jason Ryan, told Texas commissioners on Thursday.

Entergy, which had peak outages of about 252,000 customers in Texas after the hurricane, said it had restored power to about 43% of those affected.

In Freeport, however, most restaurants remained closed three days after the storm due to a lack of power.

Damaged electric lines could be seen trailing on roads, according to a Reuters witness. Residents crowded into a McDonald's restaurant in the area, one of the few places open, to charge phones.

"We're still picking back up," a local said.

Afternoon rains brought some relief to soaring temperatures in southeast Texas, which were in the low to mid-90 degrees Fahrenheit (low to mid-32 degrees Celsius), with heat indices in the 100s, the National Weather Service said.

Damage from Beryl could cost U.S. insurers roughly $2.7 million, catastrophe modeling company Karen Clark & Co said on Thursday.

An insurance adjuster said he was inspecting about 50 houses in Freeport on Thursday before heading to other coastal towns impacted by the storm.

(Reporting by Curtis Williams, Marianna Parraga, and Georgina McCartney in Houston, Arathy Somasekhar in Freeport, Texas, Scott DiSavino in New York and Liz Hampton in Denver; Editing by Emelia Sithole-Matarise, Aurora Ellis and Jamie Freed)

[© 2024 Thomson Reuters. All rights reserved.]This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.