U.S. energy firms face another storm hit amid slow recoveries

September 13, 2021

By Liz Hampton and Marianna Parraga

(Reuters) -Evacuations were underway on Monday from offshore U.S. Gulf of Mexico oil platforms as onshore oil refiners began preparing for hurricane-force winds from a second Gulf Coast storm in as many weeks.

Tropical Storm Nicholas was taking aim at the Texas coast with 70 miles per hour(113 kph) winds, threatening to bring winds and flooding to coastal Texas and Louisiana still recovering from Hurricane Ida.

Life-threatening flash floods from up to 12 inches and more of rain are possible from Texas to southwest Louisiana. Nicholas could become a hurricane just ahead of landfall on Monday night, according to the National Hurricane Center.

Nicholas is the second cyclone to threaten the U.S. Gulf Coast energy complex in recent weeks. Ida wreaked havoc on oil production and refining facilities in late August and early September. Some 113,000 Louisiana homes and businesses have been without power since Ida.

IDA DAMAGES LINGER

More than 40% of the U.S. Gulf of Mexico’s oil and gas output remained offline on Monday, two weeks after Ida slammed into the Louisiana coast, according to offshore regulator Bureau of Safety and Environmental Enforcement (BSEE).

Damages to an offshore hub that pumps oil and gas from three major oilfields for processing onshore and power outages at onshore processing plants are responsible for the production losses.

Royal Dutch Shell said it had begun evacuating non-essential personnel from its Perdido platform, which was unaffected by Ida. Occidental Petroleum Corp said it was implementing procedures to safeguard workers, signaling its own offshore evacuations.

Shippers were warned of hurricane-force winds at oil export terminals on the Texas coast. The Houston Ship Channel halted in- and outbound traffic, and the Aransas-Corpus Christi pilots suspended activities due to heavy seas.

The Coast Guard ordered vessels in the Texas ports of Houston, Galveston, Texas City and Freeport to cease cargo transfers if winds reach 40 mph. It barred inbound transit of 500 gross tons and greater vessels at all four.

Oil refiners Citgo Petroleum, Exxon Mobil Corp, Phillips 66, and Shell said they were preparing some of their Texas and Louisiana coastal plants for severe weather.

HEAVY RAINS

“The big thing is going to be the rain. It’s going to be a slow-moving storm. When storms move at 5 of 8 miles per hour it can take a while for them to clear out,” said Phil Klotzbach, a researcher at Colorado State University.

U.S. crude futures were up 1% on Monday to $70.45 a barrel, while gasoline futures were roughly flat at $2.1648 a gallon.

Oil imports and exports face potential delays from Nicholas. Vessels that were unable to load or discharge during Ida could be rerouted again, shippers said.

The first supertanker scheduled to dock since Ida at the Louisiana Offshore Oil Port (LOOP), the largest U.S. privately owned terminal for crude exports and imports, has yet to load, according to Refinitiv Eikon vessel tracking.

(Reporting by Liz Hampton in Denver, Marianna Parraga in Houston, and Arpan Varghese in Bengaluru; Editing by Marguerita Choy and Steve Orlofsky)

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