Storm Forces Valero to Shut Units at Texas City Refinery--Update

By Dan Molinski

Valero Energy Corp.'s (VLO) refinery in Texas City is shutting down many units Thursday owing to a heavy storm that has caused power outages and lightning strikes in the city, an official said.

"I know they [Valero] were doing a controlled shutdown on many of their units, but can't say for sure if it was all," said Derek Duckett, emergency management coordinator for Texas City. "They were shutting down units as a safety measure in case more power outages were experienced."

The 245,000 barrel-a-day Texas City refinery is located 40 miles southeast of Houston.

Earlier Thursday, Valero issued a statement confirming that lightning struck a transformer that serves its Texas City refinery, causing flaring. A representative said the company couldn't confirm whether it was shutting down units temporarily. He said it is company policy not to comment on operations or possible outages at its refineries.

Valero's statement said no impacts to the community were expected due to the lightning strike, but didn't indicate whether production at the refinery was affected.

Mr. Duckett said power outages were being felt in several parts of Texas City on Thursday morning as a result of the storms.

The lightning and rain storms over Texas happened as another storm far offshore, named Danny, was upgraded to a hurricane, making it the first hurricane of the 2015 Atlantic season. Hurricane Danny is moving slowly west-northwest and could take several days before it even reaches the Caribbean.

Refinery outages or partial outages in other parts of the country in recent weeks, including an Aug. 8 shutdown at a large BP PLC refinery in Whiting, Ind., have led to a rise in gasoline prices in some U.S. regions. The concern has been that high demand for gasoline might exceed supplies if refinery shutdowns cause a significant slowdown in refining.

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August 20, 2015 12:34 ET (16:34 GMT)

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