U.S. checks storm impact at oil reserve, aims to deliver crude over weekend

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(Reuters) – The U.S. Energy Department said on Friday it was reviewing “minor impacts” from Hurricane Laura at a Texas site of the national emergency oil reserve and hopes to begin assessing the status later today of one of the facility’s sites closer to the storm in Louisiana.

In advance of Laura which made landfall early Thursday near the Texas-Louisiana border, the department this week evacuated workers and closed two of the four sites of the Strategic Petroleum Reserve (SPR), a series of underground salt caverns that hold crude oil in the two Gulf Coast states.

A reentry team reached the Bill Hill site in Texas late on Thursday.

“The team is in the process of restarting all systems,” as it assesses the impacts, a department official said on Friday.

The department intends to deliver oil over the weekend from Big Hill as previously scheduled for a storage exchange program, the official said.

Nine oil companies this spring, including Exxon Mobil Corp , Chevron Corp and Alon USA Inc, rented space to store more than 20 million barrels of oil at the reserve, to help them deal with a dearth of storage as the coronavirus pandemic slammed fuel demand.

The department said Laura passed within four miles (6.44 km) of the SPR’s West Hackberry site in Louisiana. It hopes some members of a reentry team will enter that site on Friday, assuming roads are passable, to “begin damage assessment and restart operations.”

The reserve is ready to support any emergency exchanges with refineries due to Laura through its Bryan Mound and Bayou Choctaw sites, which were not hit by the storm. The SPR has not received any requests for such deliveries.

Former Secretary of State Henry Kissinger pushed for the creation of the SPR in 1975, after the Arab oil embargo spiked gasoline prices and damaged the U.S. economy. It has occasionally held emergency sales and loans of oil to energy companies in the wake of storms. Most recently, the department loaned 5.2 million barrels of oil after Hurricane Harvey inundated Texas in 2017.

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