LDN - Business

Storm Alberto triggers oil worker evacuation in U.S. Gulf

[May 26, 2018] By Erwin Seba

HOUSTON (Reuters) - Subtropical Storm Alberto, the first named storm of the 2018 Atlantic hurricane season, is forcing the evacuation of oil workers from the U.S. Gulf of Mexico as it moves toward a Monday landfall between New Orleans and Florida's panhandle.

Royal Dutch Shell has begun evacuating some oil platform workers in the U.S. Gulf of Mexico and shut production at one energy hub as a precautionary measure, the company said on Friday afternoon. Production and drilling operations elsewhere in the Eastern Gulf had not been affected, it added.

The National Weather Service (NWS) on Friday issued a tropical storm warning from Grand Isle, Louisiana, to Indian Pass, Florida. It forecast the storm would bring heavy rain and flash flooding during the Memorial Day holiday weekend to the central Gulf Coast region and the southeastern United States this weekend and into next week.

Other U.S. energy companies with operations in the Gulf and along the coast said they are monitoring the progress of the storm.

The slow-moving storm is expected to drop 10 inches to 15 inches (25.5 cm to 38 cm) of rain on portions of Mexico's Yucatan Peninsula and western Cuba, the NWS said. Between 4 inches and 8 inches (10-20 cm) of rain are expected across southern and southwestern Florida over the weekend.

Alberto is considered a subtropical storm because it a hybrid and not a tropical low, said Matt Rogers, president and co-founder of Commodity Weather Group.

"This will most likely be a (fuel) demand destruction event, bringing cooler weather to the southeast United States and high temperatures to Texas next week," Rogers said of the impact on energy consumption.

The Louisiana Offshore Oil Port (LOOP), located about 20 miles (32 km) south of the Louisiana coast in the Gulf, was operating normally, according to the company's website. The LOOP is the only U.S. port that can offload the largest crude oil tankers.

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A general view shows an empty beach as subtropical storm Alberto approaches Cancun, Mexico May 25, 2018. REUTERS/Israel Leal

Shell said it has begun securing its Gulf facilities in preparation for potentially severe weather and had shut in production at its Ram Powell hub. The facility is capable of processing 60,000 barrels of oil and 200 million cubic feet of gas per day.

BP Plc spokesman Jason Ryan said its offshore operations are continuing as usual but workers are bracing for severe weather and the company is closely monitoring Alberto.

"Offshore crews are preparing for strong winds and heavy rains," Ryan said.

Chevron Corp also said it was monitoring the storm's forecast, and offshore operations and its 340,000-barrel-per-day (bpd) Pascagoula, Mississippi, refinery were continuing as planned on Friday.

Phillips 66's 247,000 bpd Alliance, Louisiana, refinery was also monitoring the storm on Friday, the company said.

Valero Energy Corp's 125,000-bpd Meraux, Louisiana, refinery was continuing normal operations on Friday, sources familiar with plant operations said.

A storm coming before the Atlantic hurricane season begins on June 1 is not a harbinger of a busy season, Commodity Weather Group's Rogers said.

"We've had quiet years when we had an early storm and we've had busy years with an early storm," he said.

The Gulf of Mexico is home to 17 percent of daily U.S. crude output and five percent of natural gas output, according to the U.S. Energy Information Administration.

More than 45 percent of the U.S. refining capacity and 51 percent of natural gas processing capacity is located along the Gulf.

(Reporting by Erwin Seba; Editing by Phil Berlowitz and Sandra Maler)

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