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As Nate Aims for Gulf of Mexico, Oil and Gas Operators Prepare

In preparation for Hurricane Harvey, Aug, 24, 2017, oil platforms were parked after a mandatory evacuation was ordered. With Tropical Storm Nate forecast to hit the Gulf Coast, similar plans are underway.
In preparation for Hurricane Harvey, Aug, 24, 2017, oil platforms were parked after a mandatory evacuation was ordered. With Tropical Storm Nate forecast to hit the Gulf Coast, similar plans are underway.

Oil and natural gas operators began evacuating staff and halting production at U.S. Gulf of Mexico platforms Thursday ahead of Tropical Storm Nate, the second storm in as many months to rattle the Gulf Coast energy corridor.

Nate, which has killed at least 10 people in Costa Rica and Nicaragua and caused intense rainfall, is forecast to scrape past Honduras and Mexico, enter the Gulf and strengthen into a hurricane before making landfall during the weekend in Louisiana, near several major refineries.

That path takes it through an area populated by offshore oil and natural gas platforms, which pump more than 1.6 million barrels of crude per day (bpd), about 17 percent of U.S. output, according to government data.

Oil, gas production curtailed

As of Thursday, about 14.6 percent of U.S. Gulf oil production, or 254,607 bpd, was offline, the U.S. Department of the Interior’s Bureau of Safety and Environmental Enforcement (BSEE) said. About 6.4 percent of natural gas output in the area also was shut.

Forecasts for Nate have shifted in the past 24 hours. The National Hurricane Center (NHC) had forecast Wednesday that the storm would make landfall in the Florida panhandle.

BP Plc and Chevron Corp were shutting production at all Gulf platforms, while Royal Dutch Shell Plc and Anadarko Petroleum Corp suspended some production and some drilling activity in the Gulf.

Exxon Mobil Corp, Statoil and other producers have withdrawn personnel from their platforms.

Marathon Oil Corp and ConocoPhillips said they were monitoring Nate’s path but have taken no action yet.

Hangover from Harvey

Nate, the 14th named storm of the Atlantic hurricane season, comes less than two months after Hurricane Harvey tore through the Gulf, denting more than a quarter of oil production there, according to government data.

Several Texas ports have been unable to allow large tankers to return after Harvey as they wait for dredging of channels.

Some large tankers have been rerouted to Louisiana ports, some of which are now in Nate’s projected path.

The Louisiana Offshore Oil Port (LOOP), an offshore gathering hub for production platforms and crude imports from tankers, has not suspended operations and vessel activity around it continues as normal, officials said.

All Louisiana ports were open Thursday as authorities and the U.S. Coast Guard monitor the storm, according to the Port Association of Louisiana.

Refiners preparing

Refiners in Louisiana also have been scrambling ahead of Nate.

Shell was cutting back production Thursday at its 225,800-bpd Norco refinery, and Phillips 66 was considering temporarily shutting the 247,000-bpd Alliance refinery or placing it on standby, according to sources.

At least three other refineries were preparing to continue operation through Nate, sources familiar with plant operations said Thursday. PBF Energy Inc’s Chalmette, Louisiana, refinery planned to remain in operation, sources said.

PBF declined to discuss operations at the Chalmette refinery. A Shell spokesman was not available to comment.

Chevron said its Pascagoula, Mississippi, refinery was monitoring the storm’s progress. Exxon said the same about its refinery and chemical plant in Baton Rouge, Louisiana.

Marathon Petroleum Corp declined to discuss operations at the company’s Garyville, Louisiana, refinery.

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