More than 1.3 million homes and businesses in Texas remain without power four days after Hurricane Beryl struck, bringing strong winds and flooding. This has caused significant frustration among companies, officials, and residents dealing with extreme heat.
Of those without power, around 1.1 million are CenterPoint Energy (NYSE: CNP) customers, the largest provider in the state. Since Beryl’s landfall near Matagorda, Texas, CenterPoint has restored power to approximately 1.17 million customers.
The slow pace of power restoration continues to impede some companies’ efforts to resume normal operations, particularly around Freeport, a major energy hub in Texas. Although most oil and gas companies have resumed normal operations after Beryl hit as a Category-1 storm, Freeport LNG, the third-largest liquefied natural gas (LNG) producer in the U.S., has yet to restart gas processing operations. The company made initial preparations on Wednesday but has not provided an operational update since Sunday.
According to a Reuters witness, no vessels were docked at Freeport LNG’s berths, but numerous power restoration crews were active in the area. Freeport LNG had ramped down production at its liquefaction facility over the weekend and plans to resume operations when it is deemed safe.
“The major concern of the week regarding the impact of Hurricane Beryl on U.S. LNG production has diminished,” said Wei Xiong, vice president at consultancy Rystad, in a client note. “U.S. liquefaction plants and LNG production were largely unaffected, with only Freeport LNG reducing production over the weekend.” Feedgas to the facility dropped from nearly 2 billion cubic feet per day on July 6 to only 8.7 million cubic feet per day on July 7.
The port of Freeport reopened on Monday morning with vessel draft restrictions. It moved its first ship and stated that a survey would determine when the channel could be cleared for full operations.
Chemical manufacturer Olin (NYSE: OLN) declared a force majeure for some products and aromatic shipments after Beryl caused damage to its Freeport facilities.
The Texas Gulf Coast, home to extensive oil and gas processing facilities, export plants, and chemical manufacturers, accounts for 40% of U.S. oil output and 20% of the country’s natural gas production. By Thursday, most refineries, offshore production sites, and ports had returned to normal operations, having sustained limited damage.
BACKLASH
CenterPoint Energy is facing scrutiny over its preparations for Beryl and its response speed. Congresswoman Sylvia Garcia has called the slow restoration of power a public health crisis in a letter to CenterPoint. The utility has committed to restoring 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 during the storm.
“Crews have identified extensive tree damage across our system,” CenterPoint said in a release. “Trees across the Greater Houston area were particularly vulnerable due to three unusual years of weather, including significant freezes, drought, and heavy rain this past spring.”
Southeast Texas temperatures are expected to be in the low to mid-90 degrees Fahrenheit (low to mid-32 degrees Celsius) on Thursday, with heat indices in the 100s, according to the National Weather Service. Catastrophe modeling company Karen Clark & Co. estimates that damage from Beryl could cost U.S. insurers approximately $2.7 million.
Investment Opportunity Analysis
The ongoing power outages and operational disruptions present both challenges and opportunities for investors. The impact on energy infrastructure underscores the importance of resilient utility companies and the potential for investments in disaster recovery and infrastructure improvement sectors. Monitoring the performance of companies like CenterPoint Energy and Freeport LNG during recovery efforts can provide insights into their operational resilience and long-term viability.
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