Odds "high" of cyclone hitting Australia iron, oil region- weather bureau

SYDNEY Fri Feb 22, 2013 2:50am EST

SYDNEY Feb 22 (Reuters) - The risk is "high" that a tropical low off Australia's northwest coast will by strengthen into a cyclone by Sunday as it moves closer to the Pilbara iron ore mining belt, the Australian Bureau of Meteorology said on Friday.

The powerful storm is the latest to form off Australia's far western Indian Ocean coastline, and threatens to bring mining and oil and gas production to a standstill.

Companies working in the region, which include some of the world's biggest mining and oil and gas operators, were closely monitoring weather developments.

"The low is forecast to develop and become a tropical cyclone on Sunday. Further intensification is then expected and there is a significant risk that this system will become a severe tropical cyclone and impact the Pilbara or West Kimberley early next week," the Bureau of Meteorology said.

The Pilbara region ships nearly half of the world's seaborne iron ore, mostly to China, Japan and South Korea.

The area holds shipping terminals at Port Hedland, which handle about a fifth of the world's seaborne-traded iron ore and is used by BHP Billiton, Fortescue Metals Group and Atlas Iron.

The ports of Dampier and Cape Lambert, about 200 km (124 miles) south of Port Hedland are used by Australia's biggest iron ore miner Rio Tinto .

All three ports were forced to shut late last month when a cyclone measuring category 1 - the weakest on a scale of one to five. swept down the coastline.

A storm must exhibit sustained winds of between 66 and 88 km per hour to be classified category 1.

The northwestern region is also home to two of the country's largest gas production facilities, Woodside's Northwest Shelf and Pluto liquefied natural gas (LNG) plants.

Woodside, Santos, Chevron, Apache and BHP Billiton also produce oil from offshore fields that contribute about a third of Australia's oil production of 390,000 barrels per day.

"Apache has begun preparing for the passage of the tropical low expected to pass close to its facilities in the northwest of Western Australia in the next few days," Apache said in a statement emailed to Reuters.

Normal preparations include evacuation of non-essential personnel from offshore operations in the area, it said.

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