UpdateUS Gulf oil, natgas shut-ins soar on Ike

10 September 2008 20:46  [Source: ICIS news]

(Releads and updates throughout)

HOUSTON (ICIS news)--Natural gas and crude oil shut-ins in the Gulf of Mexico soared on Wednesday as a strengthening Hurricane Ike continued its path through the region, according to US agencies.

As of 11:30 hours Houston time (16:30 GMT), 95.9% of crude oil production was shut in, according to the Minerals Management Services (MMS). During the same time on Tuesday, 77.5% was shut in.

Also, 73.1% of natural gas production was shut in, up from Tuesday's 64.8%, the MMS said.

The Gulf produces 1.3m bbl/day of crude oil and 7.4bn cubic feet/day of natural gas.

Altogether, 452 out of 717 manned platforms and 81 out of 121 rigs had been evacuated, the service said.

Shell expects to shut in all of its Gulf production, with the exception of natural gas from the Fairway Field in the Mobile Bay area, the company said. Shell plans to start sending out crews to its eastern operations on Friday, with redeployment continuing through the weekend.

One industry source said the Gulf shut-ins should not pose a problem for US chemical producers, since other sources of natural gas would be available.

Plus, plants will shut down as a precaution to the storm, thus causing demand to drop for feedstock, the source said.

By Saturday, Hurricane Ike could make landfall near Port Lavaca, Texas, which is roughly 135 miles (217km)  from Houston, according to the National Hurricane Center. As of 13:00 hours Houston time, Ike was in the Gulf, about 395 miles south-southeast of the mouth of the Mississippi river.

Ike had strengthened to a category 2 hurricane on the Saffir-Simpson scale, with winds of 100 miles/hour, the centre said. Within the next 24 hours, Ike could strengthen into a major hurricane, with winds reaching at least 111 miles/hour.

Already, companies have started shutting down their Gulf coast operations in preparation for Ike.

US aluminium giant Alcoa said it was shutting down its R5604 Calciner unit at its complex in Pont Comfort, Texas, according to a filing with the Texas Commission on Environmental Quality (TCEQ). The Point Comfort site makes alumina, a major end market for caustic soda.

In addition, INEOS has begun the shutdown of its Chocolate Bayou olefins units in Texas in anticipation of Hurricane Ike, according to a filing with the TCEQ.

The company runs two olefins crackers on Chocolate Bayou with a combined capacity of 1.8m tonnes/year. Chocolate Bayou is about 40 miles south of Houston.

Areas in the state have started calling for evacuations. Brazoria County issued a voluntary evacuation order for all of the county and a mandatory order along parts that lie near the coast.

The Texas state government said it made up to 1,350 buses available to support any evacuations. Up to 7,500 Texas guardsmen were on standby.

(Additional reporting by Joe Kamalick and Heather McGuire Doyle)

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By: Al Greenwood
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