* Three producers report output shutdowns, others evacuating
* Storm heads for heaviest energy infrastructure region in
Gulf of Mexico
* Storm expected to reach shore over weekend
By Kristen Hays
HOUSTON, Oct 3 Energy companies in the Gulf of
Mexico started shutting in production on Thursday and were
evacuating some workers as Tropical Storm Karen headed toward a
crucial part of the basin, which overall provides nearly a fifth
of daily U.S. oil output.
The National Hurricane Center said the storm was expected to
be at or near hurricane strength on Friday, and that it was
expected to reach the U.S. Gulf Coast between Louisiana and the
Florida Panhandle over the weekend.
Anadarko Petroleum Corp said on Thursday afternoon
that it was fully evacuating and shutting oil and gas production
at four platforms in the storm's path, including the natural
gas-only Independence Hub, which can produce up to 1 billion
cubic feet of natural gas per day.
BHP Billiton said on Thursday it was doing
the same at its two platforms in the Gulf.
In addition, Williams Cos said it had shut its 500
million cubic feet per day Canyon Station gas platform in the
Gulf's shallow waters.
Similar announcements were expected as Karen's projected
path crossed two areas known as Mississippi Canyon and Green
Canyon, where the bulk of the Gulf's deepwater oil and gas
platforms are located.
U.S. crude futures settled lower on Thursday despite Karen's
approach as investors worried that the U.S. government shutdown
could cut demand in the world's largest oil consumer.
Gulf Coast cash gasoline markets reacted to the storm as
differentials rose on shutdown concerns, traders said. The Gulf
of Mexico accounts for about 19 percent of U.S. daily oil
production and about 6 percent of daily natural gas output,
according to the U.S Energy Information Administration.
"All storm hype," a Gulf refined products trader said on the
rise in differentials, which came despite a 1.85 million barrel
inventory build last week in the well-supplied region.
BHP's two operated platforms include Shenzi, which can
produce up to 120,000 barrels per day of oil and 50 million
cubic feet per day of natural gas.
In addition to the Independence Hub, Anadarko's shut
platforms include Marco Polo, with capacity to produce up to
120,000 bpd of oil and 300 million cubic feet per day of gas.
Anadarko operates four other platforms far west of the
Royal Dutch Shell, BP Plc, and Chevron Corp
, the top three oil producers in the U.S. Gulf, were
evacuating some workers but said production was not affected.
Exxon Mobil Corp said it was shutting about 1,000
bpd of liquids production and evacuating some workers.
Shell did not identify affected platforms, but five of the
company's six producing installations were in the storm's
projected path as well as its newest platform, Olympus, which
was anchored in the Gulf of Mexico in August.
All four of BP's operated platforms were in the path
including Thunder Horse, the largest oil and gas platform in the
world, which can produce up to 250,000 bpd of oil and 200
million cubic feet per day of gas.
All four of Chevron's platforms were in the projected path,
including Tahiti, which can produce up to 125,000 bpd of oil and
70 million cubic feet a day of natural gas.
Anadarko was evacuating workers not essential to production
from three other platforms, including the natural gas-only
Independence Hub, with capacity to produce up to 1 billion cubic
feet of gas per day.
Enterprise Products Partners said it shut four
shallow-water "junction" platforms that link deepwater output to
pipeline systems that reach shore.
Three can operate remotely, including West Delta 68, which
connects the Independence Hub's pipeline to the Kinder Morgan's
Tennessee Gas Pipeline that services New York and
REFINERIES ON COAST
Onshore, a crude distillation unit at Chevron's Pascagoula,
Mississippi, refinery with capacity of 210,000 bpd was shut
early on Thursday, market intelligence service Genscape said,
though the company did not confirm the stoppage or say if it was
Chevron said refinery workers were monitoring the storm,
"taking any appropriate precautions" and had no supply
Phillips 66, Valero Energy Corp ,VLO.N>, Shell and
Motiva Enterprises also said their refineries in Texas and
Louisiana were monitoring the storm.
Destin Pipeline Co LLC on Thursday declared force majeure
because it was unable to provide natural gas services from its
offshore Gulf of Mexico receipt points due to Tropical Storm
Karen. The pipeline receives output from some BP platforms,
including Thunder Horse.