US Gulf facilities shut ahead of storm: Update 2

Adds details on production shut-in from BSEE.

Oil and gas producers are shutting some US Gulf of Mexico facilities as tropical storm Gordon moves toward the central Gulf coast.

About 9pc of both oil and natural gas production, or 156,907 b/d and 232mn cf/d respectively, have been shut in from platforms, the Bureau of Safety and Environmental Enforcement (BSEE) said in an update on the storm. Personnel have been evacuated from 54 platforms, representing about 8pc of the 687 manned platforms in the US Gulf.

Among key producers, Anadarko has shut its Horn Mountain and Marlin production platforms, and removed all personnel from them.

ExxonMobil has evacuated its Lena platform, but said impact on production is minimal. The major is also carrying out a controlled shut-down of its Mobile Bay facilities. It has activated severe weather preparedness for the Baton Rouge area facilities, but operations there are normal, it said.

Chevron said it has shut production at one of its facilities, without identifying it. Shell has taken measures to secure its assets but is continuing production and all its rigs are also operational. Similarly, Hess said it is implementing precautionary measures at its facilities in the region.

Preparation-related shutdowns to US Gulf pipeline infrastructure have previously caused coastal prices to increase on potential disruption of offshore crude supplies. Coastal crude prices were seen rising, as Light Louisiana Sweet (LLS) rose to as much as a $6.65/bl premium over WTI, up from the highest premium reported during the prior session on 31 August, at $5.95/bl. WTI at Houston rose to a $6.35/bl premium over Cushing, Oklahoma, advancing from $5.75/bl premium over Cushing on 31 August.

Medium sour Mars rose to a $3.40/bl premium over WTI, up from the highest recorded premium at $3/bl during the prior session.

The US Coast Guard has declared condition Zulu for the ports of Mobile, Alabama, Gulfport and Pascagoula, Mississippi. That condition means the port is closed with all operations suspended. It is set when hurricane-force winds are possible within 12 hours.

The Coast Guard has set port condition Yankee for New Orleans and adjoining areas, meaning possible hurricane-force winds could be seen within 24 hours. During Yankee all affected ports are closed for inbound vessel traffic greater than 500 gross tons. The Pensacola port in Florida is also under the same condition.

The National Hurricane Center in its latest update says there is high confidence that Gordon will make landfall along the north-central Gulf coast overnight, along the coasts of Louisiana, Mississippi and Alabama.

After landfall, the storm is set to slow considerably, which may result in heavy rainfall.