Companies start shutting U.S. Gulf production on storm threat


* Three producers report output shutdowns, others evacuatingsome workers

* Storm heads for heaviest energy infrastructure region inGulf of Mexico

* Storm expected to reach shore over weekend

By Kristen Hays

HOUSTON, Oct 3 (Reuters) - Energy companies in the Gulf ofMexico started shutting in production on Thursday and wereevacuating some workers as Tropical Storm Karen headed toward acrucial part of the basin, which overall provides nearly a fifthof daily U.S. oil output.

The National Hurricane Center said the storm was expected tobe at or near hurricane strength on Friday, and that it wasexpected to reach the U.S. Gulf Coast between Louisiana and theFlorida Panhandle over the weekend.

Anadarko Petroleum Corp said on Thursday afternoonthat it was fully evacuating and shutting oil and gas productionat four platforms in the storm's path, including the naturalgas-only Independence Hub, which can produce up to 1 billioncubic feet of natural gas per day.

BHP Billiton said on Thursday it was doingthe same at its two platforms in the Gulf.

In addition, Williams Cos said it had shut its 500million cubic feet per day Canyon Station gas platform in theGulf's shallow waters.

Similar announcements were expected as Karen's projectedpath crossed two areas known as Mississippi Canyon and GreenCanyon, where the bulk of the Gulf's deepwater oil and gasplatforms are located.

U.S. crude futures settled lower on Thursday despite Karen'sapproach as investors worried that the U.S. government shutdowncould cut demand in the world's largest oil consumer.

Gulf Coast cash gasoline markets reacted to the storm asdifferentials rose on shutdown concerns, traders said. The Gulfof Mexico accounts for about 19 percent of U.S. daily oilproduction and about 6 percent of daily natural gas output,according to the U.S Energy Information Administration.

"All storm hype," a Gulf refined products trader said on therise in differentials, which came despite a 1.85 million barrelinventory build last week in the well-supplied region.

BHP's two operated platforms include Shenzi, which canproduce up to 120,000 barrels per day of oil and 50 millioncubic feet per day of natural gas.

In addition to the Independence Hub, Anadarko's shutplatforms include Marco Polo, with capacity to produce up to120,000 bpd of oil and 300 million cubic feet per day of gas.

Anadarko operates four other platforms far west of thestorm's path.

Royal Dutch Shell, BP Plc, and Chevron Corp, the top three oil producers in the U.S. Gulf, wereevacuating some workers but said production was not affected.

Exxon Mobil Corp said it was shutting about 1,000bpd of liquids production and evacuating some workers.

Shell did not identify affected platforms, but five of thecompany's six producing installations were in the storm'sprojected path as well as its newest platform, Olympus, whichwas anchored in the Gulf of Mexico in August.

All four of BP's operated platforms were in the pathincluding Thunder Horse, the largest oil and gas platform in theworld, which can produce up to 250,000 bpd of oil and 200million cubic feet per day of gas.

All four of Chevron's platforms were in the projected path,including Tahiti, which can produce up to 125,000 bpd of oil and70 million cubic feet a day of natural gas.

Anadarko was evacuating workers not essential to production from three other platforms, including the natural gas-onlyIndependence Hub, with capacity to produce up to 1 billion cubicfeet of gas per day.

Enterprise Products Partners said it shut fourshallow-water "junction" platforms that link deepwater output topipeline systems that reach shore.

Three can operate remotely, including West Delta 68, whichconnects the Independence Hub's pipeline to the Kinder Morgan's Tennessee Gas Pipeline that services New York andBoston.


Onshore, a crude distillation unit at Chevron's Pascagoula,Mississippi, refinery with capacity of 210,000 bpd was shutearly on Thursday, market intelligence service Genscape said,though the company did not confirm the stoppage or say if it wasstorm related.

Chevron said refinery workers were monitoring the storm,"taking any appropriate precautions" and had no supplyinterruptions.

Phillips 66, Valero Energy Corp ,VLO.N>, Shell andMotiva Enterprises also said their refineries in Texas andLouisiana were monitoring the storm.

Destin Pipeline Co LLC on Thursday declared force majeurebecause it was unable to provide natural gas services from itsoffshore Gulf of Mexico receipt points due to Tropical StormKaren. The pipeline receives output from some BP platforms,including Thunder Horse.

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