* Cyclone Narelle stops fifth of world iron ore trade
* Storm intensifying but unlikely to hit iron ore mines
* Apache Energy halts output from two fields
* Port Hedland still operating
By James Regan
SYDNEY, Jan 11 A severe tropical cyclone off
Australia's northwest coast that has shut ports handling a fifth
of the world's globally traded iron ore and cut supplies of
natural gas and oil intensified on Friday.
Cyclone Narelle strengthened into a category 4 storm, one
short of the most severe category 5 cyclone, meaning wind gusts
could reach 250 kmph (155 mph) by Saturday as it veers closer to
land, according to the Australian Bureau of Meteorology.
International prices paid for iron ore, which is needed to
make steel, have been climbing ahead of the start of the
Australian cyclone season, which typically runs from November to
April, in part over concerns shipments could face delays.
Narelle is the first cyclone of the 2012-13 season.
Most the iron ore is contracted by Chinese steel mills, with
Japanese and South Korean mills also big buyers.
Almost all of Australia's iron ore is mined in the nation's
far west, a sparsely-populated expanse four times the size of
Texas and serviced by only a handful of ports.
Rio Tinto , the world's second-largest iron
ore producer with 20 percent of the world market, on Thursday
suspended ship loading at the ports of Dampier and Cape Lambert.
Mining of the ore, which occurs hundreds of kilometres (miles)
in from the coast, was unaffected, according to the company.
About 200 kms (124 miles) north from the storm's path, the
Port Hedland marine shipping terminals remained in operation.
Port Hedland is used by BHP Billiton, Fortescue and
Atlas Iron to supply a further 20 percent of the world
Narelle is unlikely to make landfall and disrupt mining, but
authorities warned residents in coastal towns that conditions
will still be extremely dangerous.
At 0200 GMT, Narelle was some 500 km (320 miles) off the
coastal town of Karratha, an oil and mining services hub used by
Woodside Petroleum, Apache Corp, CITIC Pacific
, Rio Tinto, Shell and others.
Woodside, Apache and BHP Billiton are
disconnecting oil production vessels from offshore fields that
contribute about a third of Australia's oil production of
390,000 barrels per day.
Apache said it had stopped production from its Stag and Van
Gogh fields until the cyclone passes.
Gas production was uninterrupted at its Varanus Island and
Devil Creek hubs, although Apache said it will continue to
closely monitor facilities during the passage of the cyclone.
Chevron Energy, which uses Karratha as a base for
the $27 billion North West Shelf LNG project, are preparing to
evacuate staff if the cyclone suddenly changes direction and
speed, which is a common occurrence with such erratic storms in
the Pilbara iron belt.
Qantas Airways has scheduled extra flights to
evacuate workers from drilling platforms and mining sites if
There are on average around seven cyclones a year in Western
Australia between December and April.
Last March, Cyclone Lua halted output of about a quarter of
Australia's daily oil production of 390,000 barrels as companies
were forced to suspend offshore drilling and evacuate staff.