Page 17 - NorthAmOil Week 34

NorthAmOil PERFORMANCE NorthAmOil

Gulf Coast braces

for Hurricane Laura

US GULF COAST OFFSHORE oil and gas producers in the US
Gulf of Mexico – as well as refiners on the coast
– suspended operations over the weekend as
two storms in the region threatened to cause
disruptions. In a development that provided
some relief, Tropical Storm Marco was down-
graded to a tropical depression the day it made
landfall, on August 24. However, Tropical Storm
Laura strengthened into a Category 4 hurricane
as it approached the Gulf Coast, posing a serious
threat to parts of Louisiana and Texas, where it
will made landfall overnight on August 26-27.
Authorities monitoring the situation, includ-
ing the National Hurricane Center, warned on
August 26 of the seriousness of the risk Laura
posed, describing it as “extremely dangerous”.
The storm brought with it high winds, storm
surges and flash flooding. Around 20mn people
are in Laura’s path, with over 500,000 ordered to
evacuate.
The region is home to offshore oil and gas
production, as well as onshore refining, pet-
rochemical, storage and export facilities. And
industry players both offshore and onshore have
been scrambling to suspend some of their oper-
ations as Laura made its approach, with the shut-
downs pushing up crude and gasoline prices.
The US Bureau of Safety and Environmen-
tal Enforcement (BSEE), the offshore regulator,
estimated that roughly 84.3% of the Gulf’s oil
production, or 1.56mn barrels per day (bpd),
had been shut in as of August 26. Around 60.9%
of the region’s gas output, or 1.65bn cubic feet storm weakened and lingered over Texas for sev-
(46.7mn cubic metres) per day, had also been eral days.
shut in by that day. The agency said personnel LNG exporters have also been affected by
So far, the impact had been evacuated from 299 offshore plat- Laura, with the US’ largest producer of the super-
forms – equating to 46.5% of the 643 manned chilled fuel, Cheniere Energy, suspending oper-
has been smaller platforms in the Gulf. Personnel had also been ations at its Sabine Pass export terminal on the
than that of evacuated from 11 non-dynamically positioned Texas-Louisiana border. This is the first time gas
rigs, out of 12 operating in the region currently. flows to Sabine Pass have fallen to zero since the
2017’s Hurricane And all 16 dynamically positioned rigs in the facility entered service in 2016.
Gulf had moved off location out of the projected
Sempra Energy’s Cameron LNG facility in
Harvey, which paths of both Laura and Marco. Louisiana was still taking gas deliveries as of
Companies that had shut in production August 26. Essential personnel were expected
took nearly 25% and evacuated platforms included BP, Chev- to remain onsite to monitor the facility during
of US refining ron, Royal Dutch Shell and Norway’s Equinor. the storm.
“Although these terminals are built to with-
Onshore, meanwhile, Motiva Enterprises and
capacity offline. Valero Energy were among those to shut some stand hurricane force winds, the storms will
of their refining operations. Reuters estimated prevent any new vessels from approaching,” a
on August 25 that nine refining facilities, with Gelber & Associates analyst, Daniel Myers, said
a combined capacity of 2.9mn bpd, were in in report on August 24.
the process of shutting in either some or all of As of August 27, Hurricane Laura had been
their output. If all of this capacity is shut in, it downgraded to a Category 2 storm, with max-
would equate to around 14.6% of total US refin- imum sustained winds decreasing to 100 mph
ing capacity. So far, the impact has been smaller (161 kmh). It appears that producers, exporters
than that of 2017’s Hurricane Harvey, which and refiners had prepared for the worst, but the
took nearly 25% of US refining capacity offline, full impact of Laura will be better understood in
primarily as a result of heavy flooding after the the coming days.™

Week 34 27•August•2020 www. NEWSBASE .com P17