UpdateUS Gulf coast battens down for Gustav

28 August 2008 17:14 [Source: ICIS news]

Flooded holding tanks in Beaumont, Texas from hurricane Rita in 2005 HOUSTON (ICIS news)--US Gulf coast petrochemical and energy producers were making preparations for Gustav, which was expected to regain hurricane force on Thursday.

Tropical Storm Gustav remained near hurricane strength as of 10:00 Houston time (15:00 GMT), with maximum winds approaching 70 miles/hour (110km/hour), according to the National Hurricane Center. To become a hurricane again, Gustav would need sustained winds of at least 74 miles/hour.

In fact, Gustav could become a hurricane again before moving over Jamaica, meteorologists said. Gustav's centre was 45 miles east of the capital Kingston.

Current forecasts show Gustav at hurricane strength when it hits Louisiana at on Tuesday at 8:00 Houston time.

Shell said it was working toward a full evacuation of its operations assets in the US Gulf. It evacuated 400 people on Wednesday and the company said it planned to evacuate another 300 on Thursday.

“We expect to evacuate the remaining 600 personnel on Friday and Saturday,” the company added in a statement.

Refiner Valero said on Thursday that its Gulf coast refineries from Houston to St Charles, Louisiana, were on alert ahead of Gustav.

San Antonio-based Valero said it was securing emergency equipment and supplies for all its Gulf coast refineries.

Valero added that it was focusing on its 250,000 bbl/day St Charles refinery and its 325,000 bbl/day Port Arthur, Texas, refinery due to current estimates predicting landfall along the mid-Gulf Coast sometime early next week.

“We are co-ordinating our efforts with local governmental officials, and if a mandatory evacuation is declared, we will conduct an orderly shutdown of any affected refinery and evacuate our personnel,” said Valero media relations director Bill Day.

Brazil’s Petrobras said it would evacuate non-essential personnel from the Gulf of Mexico.

In the orthoxylene (OX) market, a buyer said market players were focused on the storm.

“Nothing’s going on in the market, everyone’s looking to see what’s going to happen with this hurricane,” the buyer said.

A US olefins producer in Texas said it was business as usual on Thursday.

The company was watching the storm closely, but the source said it was too soon to tell where Gustav would land. “Forecasts so far indicate the system is likely headed toward Louisiana,” the producer said.

A PPG Industries spokesperson said the company was closely watching and monitoring Gustav and had hurricane plans in place which will take effect as needed.

“All of our plants have hurricane plans in place to deal with any situation that might arise,” PPG spokesperson KC McCrory said

Gustav is also causing concern for shipping delays in the methanol market.

“The US methanol supply chain way is too inflexible to handle shipping disruptions [due to a] high percentage of US demand [being] covered via imports,” said a Gulf coast-based methanol distributor.

Steve Holcomb, spokesman for Kirby Inland Marine in Houston, Texas, one of the nation's largest barge operators, said he could not provide specifics yet about storm plans until the storm gets closer, but added it would surely affect Kirby's ability to deliver barges anywhere along the US Gulf coast.

"No matter where the storm hits, we'll have something there," Holcomb said. "Texas, Louisiana, Alabama, you name it, we have boats and barges there."

Hurricane Katrina caused considerable damage to US Gulf infrastructure three years ago, while natural gas futures prices on the NYMEX hit a record-high of $14.04/m Btu on 26 October when Hurricane Rita ripped through the Texas and Louisiana borders in the same year.

Additional reporting by Brian Balboa, Steven McGinn, Leela Landress, William Lemos, Lane Kelley and Al Greenwood
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By: Brian Ford
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