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Energy Firms Face Another Storm in US Gulf

Maritime Activity Reports, Inc.

September 13, 2021

(Image: NOAA)

(Image: NOAA)

Royal Dutch Shell on Monday began evacuating staff from a U.S. Gulf of Mexico oil platform, and other energy companies began preparing for hurricane-force winds from a second Gulf Coast storm in as many weeks.

Tropical Storm Nicholas was about 105 miles (115 km) south of Port O'Connor, Texas, and moving north with winds of 60 miles per hour (97 kph). It could become a hurricane just ahead of landfall on Monday, according to the National Hurricane Center.

Waves stirred up by Nicholas neared 12 feet (3.7 m) in height were reported outside of Port Aransas, near Corpus Christi, Texas, with wind gusts up to 54 mph about 40 miles east of Padre Island, the National Weather Service said.

Rainfall totals of up to 16 inches and possibly 20 inches in some isolated areas were in the forecast for coastal Texas.

Nicholas is the second cyclone to threaten the U.S. Gulf Coast energy complex in recent weeks. Hurricane Ida wreaked havoc on oil production and refining facilities in late August and early September.

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 the Bureau of Safety and Environmental Enforcement (BSEE).

Shell began evacuating non-essential personnel from its Perdido platform, which was unaffected by Ida. It was continuing to assess damages to its West Delta-143 hub, a transfer station for three major oilfields that remain offline.

Ports batten down
Shippers were warned of hurricane-force winds at oil export terminals on the Texas coast. The Port of Corpus Christi could see hurricane force winds in the next day, the U.S. Coast Guard said, and pilots there suspended activities.

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.

Refiners also began making preparations for the storm. Phillips 66 refineries in Sweeney, Texas, and Lake Charles, Louisiana, activated their hurricane plans, Exxon Mobil prepped its Baytown and Beaumont, Texas, petrochemical complexes for severe weather, and Citgo Petroleum said it was securing its Corpus Christi refinery in Texas.

"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 more than 1% on Monday to $70.56 a barrel, while gasoline futures were roughly flat at $2.1625 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, Marianna Parraga, and Arpan Varghese; Editing by Marguerita Choy and Steve Orlofsky)

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