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(Bloomberg) — Texas refineries are bracing for an onslaught of cold, snow and freezing rain as the US South’s first major winter storm sweeps in during what’s projected to be a frigid month.

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While temperatures in the upcoming storm aren’t expected to hold below freezing for long, the Commodity Weather Group forecasts January will likely be the coldest in 11 years, according to heating degree days value, a way to measure weather-driven energy demand. 

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The situation threatens to freeze pipelines, disable instrumentation and processing equipment, and test the state’s power grid, all potential snags for a region that holds the majority of US refining capacity and accounts for much of the country’s fuel supplies. So far, refiners and analysts say the sector is better prepared for winter’s wrath after learning from repeated storms in recent years.  

“If you have a couple of these events in a row, you get more focused, almost like a science experiment,” said Austin Lin, principal analyst refining and products North America at Wood Mackenzie.  “The winterization list gets longer and more focused.”

Motiva Enterprises LLC’s 626,000-barrel-a-day Port Arthur refinery, the nation’s largest, has been preparing for months, including adding more insulation, while Exxon Mobil Corp.’s 609,000 barrel-a-day Beaumont refinery has doubled up work shift staffing, according to people familiar with the preparations.

Global Partners, which operates six fuel terminals across Texas, said proactive measures it’s taken include managing water levels to prevent icing and fueling backup generators to address potential power outages. Citgo Petroleum Corp. said its refineries in Texas, Louisiana and Illinois have been winterized “to ensure safe, continuous operations at the expected lower temperatures.” 

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Still, the Electric Reliability Council of Texas, the state’s grid operator, has warned of potential tight power conditions through Friday due to the storm. All told, about 23 million people from Texas to the southern Appalachian Mountains are under winter storm watches, said Peter Mullinax, a forecaster with the US Weather Prediction Center. 

Grid integrity and having enough heat available to run refineries’ process units are major concerns, said Andy Lipow, president of Lipow Oil Associates in Houston. 

“In West Texas, the biggest issues will be ice and the grid,” Lipow said. “Ice on the wires could result in power outages.”

Texas is no stranger to winter storms, particularly in the last four years. In February 2021, Winter Storm Uri knocked out power and stopped production at two-thirds of regional refineries. Storm Elliott in December 2022 at its peak disabled more than 2 million barrels of crude capacity. 

With supplies plentiful, the bigger problem for the industry may be reduced demand from the weather keeping people at home, Wood Mackenzie’s Lin said. And because the storm isn’t expected to be lengthy, refiners will likely opt to remain running at high rates rather than reduce output or shut down, he said. 

—With assistance from Brian K. Sullivan.

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