October 7, 2017 / 7:09 PM / in 15 days

Hurricane Nate threatens U.S. Gulf Coast energy sites spared by Harvey

HOUSTON (Reuters) - Hurricane Nate was heading on Saturday toward refineries, offshore oil platforms and other energy facilities in the central U.S. Gulf Coast that largely were spared by Hurricane Harvey’s wrath nearly six weeks ago.

The fast-moving storm has curtailed 92 percent of daily oil production and 77 percent of daily natural gas output in the U.S. Gulf of Mexico, more than three times the amount affected by Harvey, which packed more of a punch when it hit the Texas coast.

Nate could become a Category 2 storm, the second weakest on a five-category scale used by meteorologists, with winds of up to 110 miles per hour (177 km per hour) before landfall later on Saturday, the National Hurricane Centre said.

Its track takes it closer to offshore production unlike Harvey, whose impact was greatest on refining centres.

Output shut in by Nate on Saturday amounted to 1.61 million barrels of oil per day and 2.48 billion cubic feet of natural gas per day, according to the U.S. Bureau of Safety and Environmental Enforcement (BSEE).

The storm was 105 miles (170 km) south of the mouth of the Mississippi River on Saturday afternoon and moving at a rapid 25 mph, the NHC said.

The Gulf of Mexico is home to about 17 percent of daily U.S. crude output and 5 percent of daily natural gas output, according to U.S. government estimates. Workers had been evacuated from 301 platforms and 13 rigs as of Saturday, the BSEE said.

Colby Goatley, a meteorologist at Weather Decision Technologies Inc, said his firm is helping about 10 drilling rig operators chart a course away from Nate, which is producing up to 30-foot (9.1-meter) waves near its centre, he said.

“Rigs on the eastern side (of Nate) are racing westward to get on that more favourable side,” he said. A few rig operators are heading further east to avoid winds that are strongest to the east of the storm’s eye.

Weather Decision is expecting tropical storm-force winds to last about 12 hours, Goatley said, a relatively short period that will help offshore producers return to full operations quickly and rigs return to their drilling sites.

REFINERY PRECAUTIONS

Nate is converging on refineries that remained in operation during Harvey, with Phillips 66’s (PSX.N) Alliance plant, Valero Energy Corp’s (VLO.N) Meraux facility, and PBF Energy’s (PBF.N) Chalmette refinery closest to its current track. Chevron Corp’s (CVX.N) Pascagoula, Miss., plant also is within the impact zone.

Phillips 66 confirmed that it shut its 247,000-barrel-per-day Alliance refinery on Saturday. Alliance, which is 25 miles (40 km) south of New Orleans, is close to the path Nate is forecast to take over southeastern Louisiana.

Valero and PBF Energy were planning to keep running during Nate’s passage, according to sources familiar with those operations. Those two plants and Alliance account for about 3 percent of U.S. refining capacity.

Chevron said it has made preliminary preparations for the storm, including securing loose equipment and positioning standby generators. A spokesman declined to comment further on the operation. The Pascagoula plant accounts for about 2 percent of U.S. refining capacity.

Harvey, which brought intense rains that flooded the Texas Gulf Coast, shut nearly a quarter of U.S. refining capacity and a similar amount of Gulf of Mexico oil production. At least one of the Harvey-affected refineries is still working to resume full production.

Reporting by Erwin Seba and Gary McWilliams; Editing by Paul Simao

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