Hurricane Delta shuts in 92pc US Gulf oil: Update

Updates BSEE data, other details.

Hurricane Delta has shut in 92pc of US Gulf of Mexico offshore oil production and 62pc of natural gas output as it heads for landfall later today on the Louisiana coast.

The storm threatens key energy infrastructure, including refining and petrochemical facilities in the Lake Charles area which are still recovering from another major storm in August.

Delta currently has sustained winds of 115mph, making it a Category 3 storm as it moves across the central Gulf. Federal forecasters said the storm will likely weaken to a Category 2 before it makes landfall this evening. Significant storm surge is expected from as far west as Sabine Pass on the Texas-Louisiana border to Lake Borgne just east of New Orleans. The highest storm surge is expected on Vermillion Bay, where it could run from 7-11 feet, according to the National Hurricane Center.

US producers have shut in 1.7mn b/d of offshore oil production and about 1.7 Bcf/d of natural gas output, the Bureau of Safety and Environmental Enforcement (BSEE) said today, about even with shut-ins yesterday. The shut-in volumes top the amount offline in September 2005 when Hurricane Rita knocked out 1.52mn b/d of production, which was then 97.8pc of offshore Gulf output.

Personnel have been removed from 274 producing platforms, or nearly 43pc of the manned platforms in the region ahead of Delta, the BSEE said.

Major offshore operators including Shell, Chevron, BHP, BP and Enbridge evacuated platforms, and the Louisiana Offshore Oil Port (LOOP) suspended marine operations. Chevron's Fourchon terminal and related pipeline systems were also shut in.

Restart activities and a return to full output at the 15mn t/yr Cameron LNG facility in Louisiana stalled, with the plant again suspending production.

Several ports shut down ahead of the storm. The port of Lake Charles, Louisiana, the Texas ports of Beaumont, Port Arthur, Orange and Sabine and the Houston Ship Channel were closed to all vessel traffic last night.

Some Louisiana refiners still recovering from August's Hurricane Laura have paused or reduced operations ahead of Delta. Phillips 66 said that a resumption of full operations at its 260,000 b/d refinery in Lake Charles following Hurricane Laura in August would be delayed until after Delta's landfall. Independent refiner Delek has reduced rates at its 80,000 b/d refinery in Krotz Springs, Louisiana, which is located in the storm's path.

Crude prices had moved higher yesterday, in part because of the US supply disruption, with the November NYMEX WTI contract up by about 3pc to settle at $41.19/bl and December Ice Brent increased by more than 3pc to $43.34/bl. But prices closed down today, with November NYMEX settling at $40.60/bl and December Brent at $42.85/bl.

About 17pc of US crude production and 5pc of natural gas production comes from the offshore Gulf of Mexico.

By Eunice Bridges